DEBENTURE TRUSTEE - Bombay Stock Exchange · of Companies Act, 2013 and the Rules f ramed there µv...

xx

Product Code: E8E602 Page 8

Private and Confidential - For Private Circulation only (This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus)

MEANT FOR USE OF THE ADDRESSEE ONLY

Dated: 20-May-16

Document containing Disclosure as per Schedule – I to the Securities and Exchange Board of India (“SEBI”) (Issue and Listing of Debt Securities) Regulation, 2008, as amended from time to time, SEBI Circular No. CIR/IMD/DF/17/2011 dated September 28, 2011, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time and Form No. PAS-4 pursuant to Section 42 of the Companies Act, 2013, read with Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended from time to time.

EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED Edelweiss Asset Reconstruction Company Limited (the Company / EARC) was incorporated as a Public Limited Company on October 5, 2007, under the provisions of the Companies Act, 1956 and had received a certificate for commencement of business dated February 15, 2008 from the Registrar of Companies, Maharashtra, Mumbai. The Company is registered with the Reserve Bank of India (RBI) as a Securitisation / Reconstruction Company (SC/RC) under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 vide RBI Certificate of Registration No. 13/2009 dated October 16, 2009. REGISTERED OFFICE: EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED CIN: U67100MH2007PLC174759 Registered Office: Edelweiss House, Off. C.S.T. Road, Kalina, Mumbai – 400 098, Maharashtra. Tel: +91 22 4088 6323 ; Fax: +91 22 4019 4900; E-mail: [email protected] Website: www.edelweissarc.in ISSUE BY WAY OF PRIVATE PLACEMENT BY EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED (THE “COMPANY” / “ISSUER”) OF 5000 PRINCIPAL PROTECTED - GSEC LINKED SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES OF THE FACE VALUE OF RS. 100,000/- EACH (THE DEBENTURES / NCDs) AGGREGATING TO RS. 500,000,000/- (THE “ISSUE”)

GENERAL RISKS

For the purposes of taking an investment decision, investor must rely on their own examination of the issuer and the risk associated with the investment. Investment in debt and debt related securities involve a degree of risk and the investors should not invest any funds in the debt instruments, unless they can afford to take the risks attached with such investments.

GENERAL DISCLAIMER

This Disclosure Document (DD) is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public in general to subscribe for or otherwise acquire the Secured Redeemable Non-Convertible Debentures (NCDs) to be issued by Edelweiss Asset Reconstruction Company Limited (the Issuer / Company). This DD is for the exclusive use of the intended recipient(s) to whom it is addressed and delivered and it should not be circulated or distributed to third party (ies). It cannot be acted upon by any person other than to whom it has been specifically addressed. Multiple copies hereof given to the same person / entity shall be deemed to be offered to the same person. It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the NCDs issued by the Issuer. Apart from this DD, no offer document or prospectus has been prepared in connection with the offering of this NCDs issue or in relation to the Issuer.

xx


This DD is not intended to form the basis of evaluation for the potential investors to whom it is addressed and who are willing and eligible to subscribe to the NCDs issued by the Issuer. This DD has been prepared to give general information regarding the Issuer to the parties proposing to invest in this issue of NCDs and it does not purport to contain all the information that any such party may require. The Issuer does not undertake to update this DD to reflect subsequent events and thus potential investors must confirm about the accuracy and relevancy of any information contained herein with the Issuer. However, the Issuer reserves its right for providing the information at its absolute discretion.

Potential investors to NCDs must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt and are able to bear the economic/commercial risk of investing in NCDs. It is the responsibility of the prospective subscriber to have obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and purchase the NCDs. It is the responsibility of the prospective subscriber to verify if they have necessary power and competence to apply for the NCDs under the relevant laws and regulations in force. Potential investors should conduct their own investigation, due diligence and analysis before applying for the NCDs. Nothing in this DD should be construed as advice or recommendation by the Issuer to subscribe to / invest in the NCDs. Potential investors should also consult their own advisors on the implications of application, allotment, sale, holding, ownership and redemption of these NCDs and matters incidental thereto.

The Issuer reserves the right to withdraw the private placement of the NCDs issue prior to the issue closing date(s) in the event of any unforeseen development adversely affecting the economic and regulatory environment or any other force majeure condition including any change in applicable law.

It is the responsibility of potential investors to also ensure that they will sell these NCDs in strict accordance with the terms and conditions of this DD and applicable laws, so that the sale does not constitute an offer to the public within the meaning of Companies Act, 2013 and the Rules framed there under (“the Act”).

No person has been authorized to give any information or to make any representation not contained in this DD or in any material made available by the Company to any potential investors pursuant hereto and, if given or made, such information or representation must not be relied upon as having been authorized by the Company. This DD is not intended for distribution to any person other than those to whom it is specifically addressed to and should not be reproduced by the recipient. Only the person to whom a copy of this DD is sent is entitled to apply for the NCDs. Any application by a person to whom the DD and / or the application form not been sent by the Company shall be rejected.

This DD does not constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. The distribution of this DD and the offering and sale of the NCDs may be restricted by law in jurisdictions where the registered office of the Issuer is situated.

CREDIT RATING

CARE PP-MLD AA (SO)* {(pronounced “CARE PP-MLD Double A(Structured Obligation)} by CARE Limited for Rs. 100 Crores Principal Protected Market Linked Debenture issue. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. CARE’s rating of Market Linked Debentures is an assessment of the underlying credit risk of the instrument. The rating addresses only the credit risk associated with timely payment of obligations as per terms of the issuance. The rating does not address the market risks associated with the instrument on account of linking of coupon payment to external variables such as reference equity index, equity shares, commodity process/index. This could result in variability or absence of coupon payments because of adverse movement in value of the external variables.

LISTING

The Debentures are proposed to be listed on the wholesale debt market segment of BSE Limited (“BSE” or the “Stock Exchange”).

DISCLAIMER CLAUSE FROM THE COMPANY

The Company accepts no responsibility for statements made, other than in this DD and any other material expressly stated to be issued by or at the instance of the Company in connection with the issue of the NCDs, and that anyone placing reliance

xx


on any other source of information, material or statement would be doing so at their / its own risk.

ISSUE PROGRAMME*

ISSUE OPENS ON: 20-May-16 ISSUE CLOSES ON: 20-May-16

*The Company reserves the right to change the Issue schedule including the Deemed Date of Allotment at its sole and absolute discretion, without giving any reasons or prior notice.

DEBENTURE TRUSTEE REGISTRAR TO ISSUE

SBICAP Trustee Company Limited

Apeejay House, 6th Floor,

3, Dinshaw Wachha Road,

Churchgate, Mumbai 400 020

Tel: +91 22 4302 5530 Fax: +91 22 4302 5500

E-mail: [email protected]

Website: www.sbicaptrustee.com

Contact Person: Mr. Ajit Joshi, Compliance Officer

Link Intime India Private Limited

C-13, Pannalal Silk Mills Compound

LBS Marg, Bhandup (W),

Mumbai 400 078, India

Tel: +91 22 2596 3838

Fax: +91 22 2594 6979

E-mail : [email protected]

Website: www.linkintime.co.in

Contact Person: Mr. Ganesh Jadhav

xx


TABLE OF CONTENTS

Sr. No. Particulars Page No.

1. Definitions and Abbreviations 5 – 8

2. General Information 8 – 10

3. A Brief summary of business/activities of the Issuer and its line of business 10 – 12

4. Brief history of the Issuer 12 - 14

5. Details of the Shareholding Pattern of the Company 14 - 15

6. Our Management 15 - 17

7. Details of auditors of the Company 18

8. Details of borrowings of the Company 18 – 20

9. Details of Promoters of the Company 20

10. Abridged version of Audited Standalone Financial information for at least last three years 20

11. Abridged version of Limited Review Half Yearly Standalone Financial information 20

12. Any material event/ development or change having implications on the financials/credit quality (e.g. any material regulatory proceedings against the Issuer/promoters, tax litigations resulting in material liabilities, corporate restructuring event etc) at the time of issue which may affect the issue or the investor’s decision to invest / continue to invest in the debt securities.

20 - 21

13. The names of the debenture trustee(s) and consent to the Issuer for his appointment under regulation 4 (4) and in all the subsequent periodical communications sent to the holders of debt securities.

21

14. The detailed rating rationale (s) adopted (not older than one year on the date of opening of the issue)/ credit rating letter issued (not older than one month on the date of opening of the issue) by the rating agencies

21

15. If the security is backed by a guarantee or letter of comfort or any other document / letter with similar intent, a copy of the same shall be disclosed. In case such document does not contain detailed payment structure (procedure of invocation of guarantee and receipt of payment by the investor along with timelines), the same shall be disclosed in the offer document.

21

16. Copy of consent letter from the Debenture Trustee 21

17. Names of all the recognised stock exchanges where the debt securities are proposed to be listed clearly indicating the designated stock exchange

21

18. Other details 21 - 26

19. Specific disclosures as per the Companies (Prospectus and Allotment of Securities) Rules, 2014 27 – 35

20. Undertakings by the Investor 35 – 39

21. Disclaimers 39 – 41

22. Summary Term Sheet 42 – 48

23. Scenario Analysis 48 – 49

24. Declaration 49 - 50

xx


I. DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this DD.

Term Description

“Edelweiss Asset Reconstruction Company Limited” or “EARC” or the “Company” or the “Issuer”

Edelweiss Asset Reconstruction Company Limited, a Public Limited Company incorporated under the Companies Act, 1956 and having its Registered Office at Edelweiss House, Off. C.S.T. Road, Kalina, Mumbai – 400 098, Maharashtra.

“we”, “us”, “our” Unless the context otherwise requires, the Company.

Articles of Association / AOA Articles of Association of the Company, as amended from time to time.

Disclosure Document (DD) This Disclosure Document through which the Debentures are offered on Private Placement basis containing disclosures pursuant to Schedule – I as per Securities And Exchange Board of India (“SEBI”) (Issue and Listing of Debt Securities) Regulation, 2008 as amended from time to time, SEBI Circular No. Cir. /IMD/DF/17/2011 dated September 28, 2011, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time and Form No. PAS - 4 pursuant to section 42 and rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014 as amended from time to time.

Memorandum of

Association / MOA

The Memorandum of Association of the Company, as amended from time to time.

Our Management / Board of Directors / Board

The Board of Directors of the Company (includes any Committee thereof).

Promoter(s) Edelweiss Custodial Services Limited.

The Companies Act, 2013 and Rules or the Act

Unless specified otherwise, this would imply to the provisions of the Companies Act, 2013 and the Rules framed thereunder as applicable.

Issue Related Terms

Term Description

AGM Annual General Meeting

Application Form The form in which an investor can apply for subscription to the NCDs.

Bankers to the Issue The banker to the Issue is ICICI Bank Limited.

Beneficial Owner(s) Holder(s) of the Debentures in dematerialized form as defined under section 2 of the Depositories Act.

BSE / Stock Exchange BSE Limited

Calculation Agent Edelcap Securities Limited

CDSL Central Depository Services (India) Limited.

Credit Rating Agency CARE Limited

Debenture Trust Deed Debenture Trust Deed between the Company and SBICAP Trustee Company Limited (the Debenture Trustee) as stated in the Summary Term Sheet.

Debentures / NCDs 5000 Principal Protected - GSEC Linked Secured Redeemable Non-convertible Debentures of the face value of Rs. 100,000/- EACH AGGREGATING TO RS 500,000,000/- (THE “ISSUE”)

Depositories Act The Depositories Act, 1996, as amended from time to time.

Depository Participant / DP A depository participant as defined under the Depositories Act, 1996

Depository(ies) A depository registered with the SEBI under the Securities and Exchange Board of

xx


Term Description

India (Depositories and Participant) Regulations, 1996, as amended from time to time, in this case being NSDL and CDSL.

DP-ID Depository Participant Identification Number.

EGM Extra-ordinary General Meeting

Equity Shares Equity Shares of the Company of face value of Re. 10 each.

Events of Default The occurrence of any one of the events as mentioned in the Trust Deed and the Term Sheet shall constitute an Event of Default.

FII Foreign Institutional Investor as defined under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 and registered with the SEBI under applicable laws in India.

Gilts or Government Securities’ Means securities created and issued by the Central Government and/or State Government (including treasury bill) or Government Securities as defined in the Public Debt Act, 1944 as amended from time to time.

G-Sec Government security (G-Sec) means a security created and issued by the Government for the purpose of raising a public loan or any other purpose as notified by the Government in the Official Gazette and having one of the following forms:

(i) a Government Promissory Note (GPN) payable to or to the order of a certain person; or

(ii) a bearer bond payable to a bearer; or

(iii) a stock; or a bond held in a Bond Ledger Account (BLA).

GLD G-Sec Linked Debenture

IISL India Index Services and Products Limited

Interest / Coupon Rate The rate of interest payable on the NCDs for the period specified in the DD.

NEFT National Electronic Fund Transfer Service

NRI A person resident outside India, who is a citizen of India or a person of Indian origin and shall have the same meaning as ascribed to such term in the FEMA Regulations.

NSDL National Securities Depository Limited.

PAN Permanent Account Number.

Property Immovable/Movable Property shall mean the specific identified immovable/movable properties of the Company provided as security in relation to this issue, including the Security Receipts held by the Company and the Company’s receivables

RBI Reserve Bank of India.

RBI Guidelines RBI Guidelines means the guidelines issued by RBI for the purpose of issue of NCDs.

Record Date The date, as may be fixed by the Company, which will be 15 days prior to the Redemption / Coupon payment Date (or any other date as may be decided by the Board or any Committee constituted / to be constituted by the Board) on which the determination of the persons entitled to receive coupon / redemption amount in respect of the Debentures (i.e., persons whose names are registered in the register of Debenture Holders or NSDL/CDSL record) shall be made.

Redemption Date Redemption date with respect to any Debenture shall mean the date on which repayment of principal amount and all other amounts due in respect of the Debentures will be made.

Register of Debenture Holders The register maintained by the Company containing the name of Debenture holders entitled to receive coupon/redemption amount in respect of the Debentures on the Record Date, which shall be maintained at the Registered Office.

xx


Term Description

Registered Debenture Holder The Debenture holder whose name appears in the Register of Debenture Holders or in the beneficial ownership record furnished by NSDL / CDSL for this purpose.

Registrar / Registrar to the Issue Registrar to the Issue, in this case being Link Intime India Private Limited.

RTGS Real Time Gross Settlement

SCRA Securities Contracts (Regulations) Act, 1956.

SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992.

SEBI Act The Securities and Exchange Board of India Act, 1992, as amended from time to time.

Security Means the security created as per the Debenture Trust Deed

Security Receipts Security Receipts issued by SC / RC in accordance with the provisions of the SARFAESI Act

The SARFAESI Act The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) as amended from time to time.

The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003. The Security Interest (Enforcement) Rules, 2002.

Valuation Agency The Company has entered into valuation agreement(s) with SEBI registered credit rating agencies Credit Analysis & Research Limited (“CARE”) to provide Valuation on Debentures. The details of Valuation Agent, once appointed, shall be communicated by the Issuer to the Debenture holder. Such communication shall form part of this Disclosure Document.

WDM Wholesale Debt market Segment of the BSE.

Working Days All days (except Sunday, any public holiday and any other day on which banks are closed for business in Mumbai).

Events for Early Redemption: Force Majeure Event shall mean any war, strike, lock-out, natural disaster, act of terrorism, any restriction on trading in the Underlying, an act of state or situations beyond the reasonable control of the Company occurring after an obligation under the Disclosure Document is entered into by the Company, or such obligation has become illegal or impossible, in whole or in part and includes any breakdown, failure or malfunction beyond the control of the Company of any telecommunication or computer system including, without limitation, unavailability or outages or breakdowns of any communication system(s), breach or effect of any virus in the processes or the ‘payment and delivery mechanism’, sabotage, fire, explosion(s), acts of God, civil commotion or industrial action of any kind, riots, insurrection, acts of Government, computer hacking, unauthorized access to computer data and storage devices and computer crashes. Market Suspension Event for Market Linked Debentures means the event of any suspension of trading by the authorised body on any official trading day, whereby trading shall be halted for a certain period of the day or the day or for the remainder of the trading day. Issuer Tax Change Event means that, on or after the Deemed Date of Allotment of the Debentures, the imposition of any withholding or deduction on any payments in respect of the Debentures by or on behalf of the Issuer if such withholding or deduction is required by law. Change in Law means that, on or after the Deemed Date of Allotment of the Debentures (A) due to the adoption of or any change in any applicable law or regulation (including, without limitation, any tax law), or (B) due to the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), the Issuer determines in its sole discretion that (i) it has become illegal for the Issuer to hold, acquire or dispose of the Underlying Security/Units relating to the Debentures, or (ii) the Issuer will incur a materially increased (as compared with the circumstances existing on the Deemed Date of Allotment)

xx


cost in relation to the performance of the Issuer’s obligations under the Debentures (including, without limitation, due to any increase in tax liability, decrease in tax benefit or other adverse effect on the tax position of the Issuer). Reference Index Modification Event means any material change in the composition of index or the method of computation of index as determined by the calculation agent.

II. GENERAL INFORMATION (i) NAME, ADDRESS, WEBSITE AND OTHER CONTACT DETAILS OF THE ISSUER:

Edelweiss Asset Reconstruction Company Limited CIN: U67100MH2007PLC174759 Registered Office & Corporate Offce: Edelweiss House, Off C.S.T. Road, Kalina, Mumbai – 400 098, Maharashtra. Tel: +91 22 4088 6323; Fax: +91 22 4019 4900 Email: [email protected] Website: www.edelweissarc.in

(ii) DATE OF INCORPORATION: October 5, 2007

(iii) COMPLIANCE OFFICER OF THE ISSUER:

Mr. Deepak Nautiyal Edelweiss House, Off C.S.T. Road, Kalina, Mumbai – 400 098, Maharashtra, India. Tel: +91 22 4088 5780; Fax: +91 22 4019 4900

(iv) CHIEF FINANCIAL OFFICER OF THE ISSUER:

Mr. Mehul Gandhi Edelweiss House, Off C.S.T. Road, Kalina, Mumbai – 400 098, Maharashtra, India. Tel: +91 22 4088 5838; Fax: +91 22 4019 4900

(v) DEBENTURE TRUSTEE:

SBICAP Trustee Company Limited Apeejay House, 6th Floor, 3, Dinshaw Wachha Road, Churchgate, Mumbai 400 020 Tel: +91 22 4302 5530 Fax: +91 22 4302 5500 E-mail: [email protected] Website: www.sbicaptrustee.com Contact Person: Mr. Ajit Joshi, Compliance Officer

(vi) REGISTRAR TO THE ISSUE:

Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai - 400 078, Maharashtra, India

Website: www.linkintime.co.in

(vii) CREDIT RATING AGENCY TO THE ISSUE:

xx


Name: Credit Analysis & Research Limited Address: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (E), Mumbai- 400 022 Maharashtra, India

(viii) AUDITORS OF THE ISSUER:

M/s Khimji Kunverji & Co, Chartered Accountants Sunshine Tower, Level 19, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013, Maharashtra, India. Website: www.khimjikunverji.com

III. BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS OR

BUSINESS CARRIED ON BY THE COMPANY AND ITS SUBSIDIARIES WITH THE DETAILS OF BRANCHES OR UNITS; IF ANY

i. Overview: The Company is registered with the Reserve Bank of India (RBI) as a Securitisation / Asset Reconstruction Company (SC/ARC) under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 vide RBI Certificate of Registration No. 13/2009 dated October 16, 2009. The Company is carrying on business of an Asset Reconstruction Company and / or Securitisation Company as permitted by RBI. The Company is engaged in the business of acquiring Loan Portfolios, Loan Accounts, Non-Performing Assets (NPA) from the Banks and Financial Institutions. The Company neither has any Subsidiary nor any Unit. The Company has a branch office at UGF-1, Mercantile House, 15, Kasturba Gandhi Marg, New Delhi - 110 001.

ii. Corporate Structure:

iii. Key Operational and Financial Parameters / Summary of Financial position of the Company for last three audited financial years and half year ended March 31, 2016:

(Amount in Rs.)

Promoter

Edelweiss Custodial Services Limited

(47.41%)

Edelweiss Asset Reconstruction

Company Limited

Non-Promoter

(52.59%)

xx


Parameters Financial Year ended Financial Year ended Financial Year ended

March 31, 2016 March 31, 2015 March 31, 2014

Networth 205,52,18,841 153,25,09,423 119,16,77,481

Total Debt 2,242,59,46,346 1,326,55,91,785 413,37,33,050

of which – Non Current Maturities of Long Term Borrowing

960,49,68,263 941,00,00,000 49,00,00,000

Preference Share Capital - - -

Short Term Borrowing 1,282,09,78,083 385,55,91,785 365,37,33,050

Current Maturities of Long Term Borrowing - - -

Net Fixed Assets 97,44,897 81,49,942 3,18,564

Non Current Assets 8,46,47,502 9,23,01,611 5,97,80,412

Cash and Cash Equivalents 48,64,53,305 13,24,81,994 66,58,005

Non-Current Investments 2,228,32,77,013 1,177,24,25,635 -

Current portion of Non-current Investments 134,53,54,952 196,79,14,944 532,94,34,896

Current Assets 272,28,44,663 331,25,04,963 568,33,50,685

Non Current Liabilities 971,89,67,951 945,90,72,198 51,14,39,086

Current Liabilities 1,331,66,12,886 418,56,50,588 404,00,14,530

Off Balance Sheet Assets - - -

Interest Income 5,46,38,004 2,35,22,030 2,80,37,623

Provisioning & Write-offs 74,41,93,655 10,70,51,264 1,66,28,922

EBIDTA 276,69,11,074 176,48,14,926 19,82,51,514

EBIT 276,32,77,476 176,29,77,286 19,82,24,535

Interest Expense 207,41,25,717 130,48,68,968 6,18,41,241

PAT 44,97,57,048 34,08,31,940 9,78,59,553

Dividend Amounts - - -

Current Ratio 0.20 0.79 1.41

Interest Coverage Ratio 1.33 1.35 3.21

Gross Debt / Equity Ratio 10.91 8.66 3.48

Debt Service Coverage Ratios 1.27 1.30

2.76

iv. Gross Debt: Equity Ratio of the Company:

Before the issue of debt securities 10.91

After the issue of debt securities 11.1551

v. Project cost and means of financing, in case of funding of new projects: Not applicable

IV. A BRIEF HISTORY OF THE ISSUER

i. History:

xx


Edelweiss Asset Reconstruction Company Limited (the Company / EARC) was incorporated as a Public Limited Company on October 5, 2007 under the provisions of the Companies Act, 1956 and had received a certificate for commencement of business dated February 15, 2008 from the Registrar of Companies, Maharashtra, Mumbai.

The Company is registered with RBI as a Securitisation / Asset Reconstruction Company (SC / ARC) under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 vide RBI Certificate of Registration No. 13/2009 dated October 16, 2009. ii. Share Capital of the Company as on March 31, 2016

Particulars Amount

(in Rs.)

A. Authorised Share Capital

15,00,00,000 Equity Shares of Rs. 10 each 150,00,00,000

Total 150,00,00,000

B. Issued, Subscribed and Paid-up Share Capital

10,52,63,158 Equity Shares of Rs. 10 each, fully paid-up 105,26,31,580

Total 105,26,31,580

C. Size of the present Offer NIL

D. Paid up capital

(A) after the offer; 105,26,31,580

(B) after conversion of convertible instruments (if applicable) 105,26,31,580

E. Share premium account

before the offer 2,03,15,790

after the offer 2,03,15,790

iii. Change in Capital Structure as on March 31, 2016 (for last five years)

The change in Authorised Capital of the Company is as under:

Date of Change (AGM / EGM) Amount (Rs. in Crores) Change in Authorised Capital

August 22, 2011 100 Increased from Rs. 50 Crores to Rs. 100 Crores

August 26, 2014 150 Increased from Rs. 100 Crores to Rs. 150 Crores

iv. Equity Share Capital History of the Company as on March 31, 2016 (since Incorporation):

OR

Details of the existing share capital of the Issuer

Date of Allotment

No. of Equity Shares

Allotted

Face Value (Rs.)

Issue Price (Rs.)

Consid-eration

Nature for allotment

Cumulative

xx


v. Details of the allotment made in the last one year preceding the date of the DD separately indicating the allotments

made for considerations other than cash and the details of the consideration in each case:

Note: There are no allotments made for consideration other than cash

vi. Details of any acquisitions or amalgamation in the last one year: None

vii. Details of any Reorganization or Reconstruction in the last one year:

Type of Event

Date of Announcement Date of Completion Details

NIL

V. DETAILS OF THE SHAREHOLDING OF THE COMPANY AS ON MARCH 31, 2016:

(a) Shareholding pattern of the Company as on March 31, 2016:

Sr. No. Particulars Total No. of Equity Shares

No. of Shares in Demat form

Total Shareholding as % of total no. of Equity


Equity Share Capital (Rs.)

Equity Share Premium (Rs.)

06-Oct-07 50,000 10 10 Cash By way subscription to the Memorandum of Association of the Company

50,000 5,00,000 Nil

12-Dec-08 2,150,000 10 10 Cash Further (Right) Issue

2,200,000 22,000,000 Nil

21-Jan-10 2,800,000 10 10 Cash Further (Right) Issue

5,000,000 50,000,000 Nil

13-Sep-10 20,000,000 10 10 Cash Further (Right) Issue

25,000,000 250,000,000 Nil

27-Jun-11 25,000,000 10 10 Cash Further (Right) Issue

5,00,00,000 50,00,00,000 Nil

20-Jun-13 50,000,000 10 10 Cash Further (Right) Issue

10,00,00,000 100,00,00,000 Nil

10-Jul-15 52,63,158 10 13.86 Cash Preferential Allotment

10,52,63,158 105,26,31,580 2,03,15,790

Date of Allotment

No. of Equity Shares Allotted

Face Value (Rs.)

Issue Price (Rs.)

Conside-ration

Nature for allotment

Cumulative


Equity Share Capital

Equity Share Premium (Rs.)

10-Jul-15 52,63,158 10 13.86 Cash Preferential Allotment

10,52,63,158 105,26,31,580 2,03,15,790

xx


Shares

1. Edelweiss Custodial Services Limited* 4,99,09,148 2,49,54,568 47.41

2. Reeta Kuhad 1,40,00,000 1,40,00,000 13.30

3. Alok Tandon 1,42,90,852 1,42,90,852 13.57

4. Vineet Kashyap 99,00,000 - 9.41

5. Preeta Balia 20,00,000 5,00,000 1.90

6. Aakanksha Management Consultancy & Holdings (P) Ltd.

99,00,000 - 9.41

7. M/s. Gamla Livforsakringsaktiebolaget SEB Trygg Liv (publ).

52,63,158 - 5.00

Total 10, 52,63,158 5,37,45,420 100.00

* Including the shares held by Nominees. Note: None of the shares of the Company are pledged by the Promoters. (b) List of Top 10 holders of Equity Shares of the Company as on March 31, 2016

Sr. No.

Name of Shareholder No. of Equity Shares held

No of Shares in Demat form

% of Share Holding

1 Edelweiss Custodial Services Limited 4,99,09,148 2,49,54,568 47.41

2 Reeta Kuhad 1,40,00,000 1,40,00,000 13.30

3 Alok Tandon 1,42,90,852 1,42,90,852 13.57

4 Vineet Kashyap 99,00,000 - 9.41

5 Preeta Balia 20,00,000 5,00,000 1.90

6 Aakanksha Management Consultancy & Holdings (P) Ltd.

99,00,000 - 9.41

7 M/s. Gamla Livforsakringsaktiebolaget SEB Trygg Liv (publ).

52,63,158 - 5.00

Total 10, 52,63,158 5,37,45,420 100%

* Including the shares held by Nominees.

VI. OUR MANAGEMENT:

a. Brief particulars of the management of the Company: The Board of Directors of the Company consists of 1 (One) Managing Director & CEO (Executive Director), 3 (Three) Non-Executive Non Independent Directors and 4 (Four) Independent Directors. Management of the Company The general superintendence, direction and management of the affairs and business of the Company are vested in the Managing Director & CEO, who is also responsible for the day to day management of the Company, as directed by the Board of Directors of the Company from time to time.

b. Details of the Current Directors of the Company:

Sr. No.

Name, DIN and Designation

Age Address Occupation Date of Appointment

Details of other Directorship

1. Mr. Taruvai Subbayya Krishnamurthy DIN: 00279767 Designation: Independent

75 7-S9, Gokul Tower Apartments, Sir C P Ramasamy Road, Alwarpet, Chennai-600018

Retired 13/08/2008 1. Shriram Life Insurance Company Limited.

2. DSP BlackRock Trustee Company Private Limited.

3. RRB Energy Limited. 4. REPCO Home Finance

Limited.

xx


Director 5. The Hindu Educational Organisation.

6. SBL Private Limited. 7. Central Depository Services

(India) Limited.

2. Mr. Venkataraman Janakiraman DIN: 00051804 Designation: Independent Director

76 "Kurinji"- Villa No 18, Shenbhagam Estates, 8/337, Madhampatti Village, Siruvani Main Road, Coimbatore – 641010

Retired 13/08/2008 1. IL&FS Securities Services Limited.

2. Road Infrastructure Development Company of Rajasthan Limited.

3. IL&FS Environmental Infrastructure and Services Limited.

4. ISSL Settlement & Transaction Services Limited.

3. Mr. Kasaragod Ashok Kini DIN: 00812946 Designation: Independent Director

70 B-202, Mantri Pride Apartments, Mountain Road, 1

st Block

Jayanagar, Bangalore – 560011.

Retired 29/11/2011 1. GOCL Corporation Limited. 2. UTI Trustee Company

Private Limited. 3. FINO PayTech Limited. 4. SBI Capital Markets Limited. 5. Gulf Oil Lubricants India

Limited. 6. Intrepid Finance and

Leasing Private Limited. 7. Nihilent Technologies

Limited.

4. Mr. Sudeshkumar Ganpatrai Gulati DIN: 01017041 Designation: Independent Director

72 Flat No. 603, 6th Floor, Building A-14, B-Wing, Bhakti Park, Wadala (E), Mumbai – 400 031.

Retired 29/08/2011 None

5. Mr. Vikas Balia DIN: 00424524 Designation: Non-Executive Non Independent Director

40 9, Nehru Park, Jodhpur - 342003.

Advocate

06/03/2013 1. Mukan Consultants Private Limited.

2. Mehta Balia Consultants Private Limited.

3. Satyagyan Foundation.

6. Mr. Rashesh Shah DIN: 00008322 Designation: Non-Executive Non Independent Director

52 B-233, 10th Floor, Kalpataru Horizon-B, S K Ahire Marg, Worli, Mumbai -400018.

Service 05/10/2007 1. Edelweiss Financial Services Limited.

2. Edelweiss Tokio Life Insurance Company Limited.

3. ECL Finance Limited. 4. Federation of Indian

Chamber of Commerce and Industry

xx


7. Ms. Vidya Shah DIN: 00274831 Designation: Non-Executive Non Independent Director

49 B-223, 9th Floor, Kalpataru Horizon-B, S K Ahire Marg, Worli, Mumbai – 400018.

Service 12/03/2015 1. EdelGive Foundation. 2. Common Purpose India. 3. ToolBox India Foundation. 4. Edelweiss Financial Services

Limited. 5. ECL Finance Limited. 6. Edelweiss Holdings Limited. 7. Women on Wings

Foundation.

8. Mr. Siby Antony DIN: 00075909 Designation: Managing Director & CEO

68 Flat No.1701, 17th Floor, Royal Residency, Wing No - A, Chiwada Gally, Lalbaug, Mumbai, 400012.

Service 01/08/2008 1. IMP Powers Limited. 2. Edelweiss Web Services

Limited.

Confirmation: To the best of the Company’s knowledge and belief, none of the current Directors are appearing in the RBI defaulter list and / or ECGCs defaulter list and none of the directors, promoters or key managerial personnel has any financial or other material interest in the offer. (c) Change in Directors since last three years (for the period April 1, 2013 to March 31, 2016):

Name and Designation DIN Date of Appointment / Resignation

Director of the Company since (in case of

resignation)

Remarks

Ms. Vidya Shah, Non-Executive Non Independent Director

00274831

12/03/2015 N.A. Appointment

VII. DETAILS OF AUDITORS OF THE COMPANY:

(a) Details of the Auditors of the Company:

Name Address Auditor since

M/s Khimji Kunverji & Co, Chartered Accountants

Sunshine Tower, Level 19, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013

25/02/2014

(b) Details of changes in auditors since last three years:

Name Address Date of Appointment / Resignation

Auditor of the Company Since (in

case of resignation)

Remarks

NGS & Co, LLP, Chartered Accountants

B/46, 3rd

Floor, Pravasi Industrial Estate, V. N. Road, Goregaon (E), Mumbai – 400 063

11/02/2014 11/07/2008 Resignation

M/s Khimji Kunverji & Co, Chartered

Sunshine Tower, Level 19, Senapati Bapat

25/02/2014 N.A. Appointment

xx


Accountants Marg, Elphinstone Road, Mumbai – 400 013

VIII. DETAILS OF BORROWINGS AS ON MARCH 31, 2016:

(a) Details of Secured Loan Facilities:

Lender’s name Type of Facility

Amount Sanctioned (in Rs.)

Principal Amount

Outstanding (in Rs.)

Last Repayment Date

Security

Federal Bank Term loan 50,00,00,000 44,00,00,000 March 26, 2019 Secured by Pledge of Security Receipts

Bank of Maharashtra Term loan 50,00,00,000 50,00,00,000 June 30, 2019 Secured by Pledge of Security Receipts

IDBI Bank Bank Overdraft

40,00,00,000 25,93,61,089 NA Secured by Pledge of Security Receipts

Total 140,00,00,000 119,93,61,089

(b) Details of Unsecured Loan Facilities :

Lender’s name Type of Facility Amount Sanctioned

(in Rs.)

Principal Amount Outstanding

(in Rs.)

Repayment Date / Schedule

Edel Commodities Limited

Long Term Line of Credit 487,00,00,000 487,00,00,000 36 Months from Sanction

Edel Commodities Trading Limited

Long Term Line of Credit 210,00,00,000 209,49,68,263 36 Months from Sanction

Edelweiss Commodities Services Limited

Short Term Line of Credit 1500,00,00,000 805,68,83,613 12 Months from Sanction

Edel Commodities Trading Limited

Short Term Line of Credit 13,00,00,000 12,97,33,010 12 Months from Sanction

Edelvalue Partners Short Term Line of Credit 2000,000,000 2000,000,000 12 Months from Sanction

Total 2,410,00,00,000 1,715,15,84,886

(c) Details of Non Convertible Debentures:

Tenor / Period of Maturity

Coupon Amount (In Rs.)

Date of Allotment

Redemption Date / Schedule

Credit Rating Secured / Unsecured

Security

5 years from the date of allotment

17% 150,00,00,000 27/03/2015 27/03/2020 N.A Unsecured N.A.

5 years from the date of allotment

10.75% 30,00,00,000 22/02/2016 22/02/2021 “CARE AA- (SO)” Secured A first ranking mortgage and charge on the immovable property being flat and pledge of the

xx


Security Receipts

(d) List of Top 10 Debenture holders as on March 31, 2016:

Sr. No. Name of Debenture holder Amount (Rs. in Crores)

1 Edel Commodities Trading Limited 150

2 Edelweiss Tokio Life Insurance Company Limited 30

Note: The Company has only Two Debenture Holders. (e) The amount of corporate guarantee issued by the Issuer along with name of the counter party (like name of the

subsidiary, JV entity, group company, etc) on behalf of whom it has been issued: NONE

(f) Details of Commercial Paper (as on March 31, 2016):

Maturity Date Amount Outstanding

16/03/2017 183,40,50,500

27/05/2016 14,77,35,275

29/06/2016 29,32,09,597

Total 227,49,95,371

(g) Details of rest of the borrowing (if any including hybrid debt like FCCB, Optionally Convertible Debentures /

Preference Shares) as on March 31, 2016:

Party Name (in case of Facility) / Instrument Name

Type of Facility

Amount sanctioned / Issued

Principal Amount Outstanding

Repayment Date / Schedule

Credit Rating

Secured / Unsecured

Security

NIL

(h) Details of all default/s and/or delay in payments of interest and principal of any kind of term loans, debt securities

and other financial indebtedness including corporate guarantee issued by the Company, in the past five years: NONE

(i) Details of outstanding borrowings taken / debt securities issued where taken / issued (a) for consideration other than

cash, whether in whole or part, (b) at premium or discount, or (c) in pursuance of an option: NONE

IX. DETAILS OF PROMOTERS OF THE COMPANY :

(a) Details of Promoter holding in the Company as on March 31, 2016

Name of Shareholders

Total No. of Equity Shares

No. of Shares in Demat form

Total Shareholding as % of Total No. of Equity

Shares

No of Shares

pledged

% of Shares pledged with respect to Shares owned

xx


Edelweiss Custodial Services Limited

4,99,09,148 2,49,54,568 47.41% Nil Nil

X. ABRIDGED VERSION OF AUDITED CONSOLIDATED (WHEREVER AVAILABLE) AND STANDALONE FINANCIAL

INFORMATION (LIKE PROFIT & LOSS STATEMENT, BALANCE SHEET AND CASH FLOW STATEMENT) FOR AT LEAST LAST THREE YEARS AND AUDITOR QUALIFICATIONS, IF ANY.

Abridged version of Audited Standalone Financial information for last three years is enclosed as Annexure A

XI. ABRIDGED VERSION OF LATEST AUDITED / LIMITED REVIEW HALF YEARLY CONSOLIDATED (WHEREVER AVAILABLE)

AND STANDALONE FINANCIAL INFORMATION (LIKE PROFIT & LOSS STATEMENT AND BALANCE SHEET) AND AUDITORS QUALIFICATIONS, IF ANY.

Abridged version of the audited financial results for the financial year ended March 31, 2016 is enclosed as Annexure B

XII. ANY MATERIAL EVENT / DEVELOPMENT OR CHANGE HAVING IMPLICATIONS ON THE FINANCIALS / CREDIT QUALITY

(E.G. ANY MATERIAL REGULATORY PROCEEDINGS AGAINST THE ISSUER / PROMOTERS, TAX LITIGATIONS RESULTING IN MATERIAL LIABILITIES, CORPORATE RESTRUCTURING EVENT ETC.) AT THE TIME OF ISSUE WHICH MAY AFFECT THE ISSUE OR THE INVESTOR’S DECISION TO INVEST / CONTINUE TO INVEST IN THE DEBT SECURITIES: NONE

XIII. THE NAMES OF THE DEBENTURE TRUSTEE(S) AND CONSENT TO THE ISSUER FOR HIS APPOINTMENT UNDER REGULATION 4 (4) AND IN ALL THE SUBSEQUENT PERIODICAL COMMUNICATIONS SENT TO THE HOLDERS OF DEBT SECURITIES The Issuer has received the consent dated March 29, 2016 from SBICAP Trustee Company Limited to act as the Trustees on behalf of the Debenture Holders.

XIV. THE DETAILED RATING RATIONALE (S) ADOPTED (NOT OLDER THAN ONE YEAR ON THE DATE OF OPENING OF THE ISSUE) / CREDIT RATING LETTER ISSUED (NOT OLDER THAN ONE MONTH ON THE DATE OF OPENING OF THE ISSUE) BY THE RATING AGENCIES SHALL BE DISCLOSED. The rating rationale / letter adopted / issued by the Rating Agency is enclosed as Annexure C.

XV. IF THE SECURITY IS BACKED BY A GUARANTEE OR LETTER OF COMFORT OR ANY OTHER DOCUMENT / LETTER WITH SIMILAR INTENT, A COPY OF THE SAME SHALL BE DISCLOSED. IN CASE SUCH DOCUMENT DOES NOT CONTAIN DETAILED PAYMENT STRUCTURE (PROCEDURE OF INVOCATION OF GUARANTEE AND RECEIPT OF PAYMENT BY THE INVESTOR ALONG WITH TIMELINES), THE SAME SHALL BE DISCLOSED IN THE OFFER DOCUMENT. Edelweiss Financial Services Limited has issued unconditional and irrevocable guarantee securing interest and principal of the Issuer under these Debentures.

XVI. COPY OF CONSENT LETTER FROM THE DEBENTURE TRUSTEE: The copy of consent letter from Debenture Trustee is enclosed as Annexure D.

XVII. NAMES OF ALL THE RECOGNISED STOCK EXCHANGES WHERE THE DEBT SECURITIES ARE PROPOSED TO BE LISTED CLEARLY INDICATING THE DESIGNATED STOCK EXCHANGE

The Debentures are proposed to be listed on BSE. The designated stock exchange is BSE.

XVIII. OTHER DETAILS

(a) Debenture Redemption Reserve

xx


The Debenture Redemption Reserve shall be as per the provisions of the Companies Act, 2013 and the Rules framed thereunder as amended from time to time.

(b) Issue / Instrument Specific Regulations

The Debentures are governed by and will be construed in accordance with the Indian laws. The Company, the Debentures and Company’s obligations under the Debentures shall, at all times, be subject to the provisions of the Companies Act, 2013, regulations/guidelines/directions of RBI, SEBI and Stock Exchanges and other applicable laws and regulations from time to time. The Debenture holders, by purchasing the Debentures, agree that the courts in Mumbai shall have exclusive jurisdiction with respect to any matters relating to the Debentures. Further, the said Debentures shall be subject to the terms and conditions as contained in the application form, Disclosure document, Debenture Trust Deed, Debenture Trustee Appointment Agreement and other Transaction / Security documents.

(c) Application for the Debentures

How to Apply Applications for the Debentures must be made in the Application Form and must be completed in block letters in English by investors. Application Forms must be accompanied by a cheque or electronic fund transfer instruction drawn or made payable in favour of "Edelweiss Asset Reconstruction Company Limited” and marked ‘A/c Payee Only’ in case of cheques. The full amount of the Debentures applied for has to be paid along with the delivery of the fully completed and executed Application Form together with other applicable documents described below. Cheques / electronic fund transfer instruction may be drawn on any bank which is situated and is a member or sub-member of the Bankers’ clearing houses located at Mumbai. Investors are required to make payments only through cheques / electronic transfer payable at Mumbai.

The Company assumes no responsibility for any applications / cheques / lost in mail or in transit.

Who can Apply Nothing in this DD shall constitute and /or deem to constitute an offer or an invitation to an offer, to be made to the Indian public or any section thereof through this DD, and this DD and its contents should not be construed to be a prospectus under the Act.

The following categories of investors, when specifically approached, are eligible to apply for this private placement of Debentures:

Individuals;

Hindu Undivided Family;

Trust;

Limited Liability Partnerships;

Partnership Firm(s);

Portfolio Managers registered with SEBI;

Association of Persons;

Companies and Bodies Corporate including Public Sector Undertakings;

Commercial Banks;

Regional Rural Banks;

Financial Institutions;

Insurance Companies;

Mutual Funds, Provident Funds, Pension Funds and Gratuity Funds; and

Any other investor eligible to invest in these Debentures.

xx


All investors are required to comply with the relevant regulations / guidelines applicable to them for investing in this

Issue.

This DD and the contents hereof are restricted for only the intended recipient(s) who have been addressed and only such recipients are eligible to apply for the Debentures. Furthermore, NRIs, OCBs, FIIs, FPIs and other persons resident outside India are not eligible to apply for or hold the Debentures.

Application by Banks / Corporate Bodies / Mutual Funds / FIs / Trusts / Statutory Corporations: The applications must be accompanied by certified true copies of –

(i) Memorandum and Articles of Association / Constitution / Bye-laws / Trust Deed;

(ii) Certified True Copy of the resolution authorizing investment and containing operating instructions; and

(iii) Specimen signatures of authorized signatories.

Application made by an Asset Management Company or custodian of Mutual Fund shall clearly indicate the name of the

concerned scheme for which application is being made.

Application under Power of Attorney A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signatures of all authorised signatories must be lodged along with the submission of the completed Application Form. Further, modifications / additions in the power of attorney or authority should be delivered to the Company at its Office.

PAN Each of the applicants should mention his / her / their PAN allotted under the IT Act. Applications without this will be considered incomplete and are liable to be rejected. Basis of Allotment The Company has the sole and absolute right to allot the Debentures to any applicant. Right to Accept or Reject Applications The Company is entitled at its sole and absolute discretion to accept or reject any application, in part or in full, without assigning any reason. Application Forms that are not complete in all respects shall be rejected at the sole and absolute discretion of the Company.

Payment of Coupon Coupon will be paid only to the Debenture holders registered in the Register of Debenture holders or to the Beneficial Owners. Coupon on the Debentures, if any shall be payable on the Redemption Date. The determination of the persons entitled to receive Coupon in respect of the Debentures (i.e. persons whose names are registered in the register of Debenture holders or the Depositories’ record) shall be made on the Record Date. In the case of joint holders of Debentures, Coupon shall be payable to the first named Debenture holder. Redemption The entire principal amount of the Debentures will be repaid, on or before the Redemption Date. No surrender of debentures by the debenture holders will be allowed prior to the redemption date.

xx


The Debentures held in the dematerialised form shall be taken as discharged on payment of the redemption amount by the Company on maturity to the registered debenture holders whose name appears in the Register of debenture holders on the record date. Such payment will be a legal discharge of the liability of the Company towards the debenture holders. On the Company dispatching the amount as specified above in respect of the Debentures, the liability of the Company shall stand extinguished. The Company's liability to the debenture holders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due dates of redemption in all events. Further, the Company will not be liable to pay any Coupon or compensation from the dates of such redemption.

Right to Re-purchase and Re-issue the Debentures The Company will have power, exercisable at its sole and absolute discretion from time to time, to re-purchase a part or all of its Debentures from the secondary markets or otherwise, at any time prior to the Redemption Date, subject to applicable law and in accordance with the applicable guidelines/regulations, if any. In the event of a part or all of its Debentures being repurchased as aforesaid or redeemed under any circumstances whatsoever, the Company shall have, and shall be deemed always to have had, the power to reissue the Debentures either by reissuing the same Debentures or by issuing other debentures in their place. Further the Company, in respect of such re-purchased/re-deemed Debentures shall have the power, exercisable either for a part or all of those Debentures, to cancel, keep alive, appoint nominee(s) to hold or reissue at such price and on such terms and conditions as it may deem fit and as permitted by law. Place, Currency and Mode of Payment All obligations of the Company on the Debentures including Coupon, are payable at Mumbai in Indian rupees only. The payments will be made through cheques or RTGS / NEFT / Fund Transfer mode. Issue of Debentures in Dematerialised Form The Debentures will be issued only in dematerialized form. The trading in Debentures will be in dematerialized mode only. The Company has made arrangements with the depositories for the issue of the Debentures in dematerialised form. Investors will have to hold the Debentures in dematerialised form as per the provisions of Depositories Act. The Depository Participant’s name, DP-ID and beneficiary account number must be mentioned at the appropriate place in the Application Form. The Company shall take necessary steps to credit the Debentures allotted to the depository account of the investor. Succession In the event of demise of a Registered Debenture holder of the Debentures, or the first holder in the case of joint holders, the Company will recognize the executor or administrator of the demised Debenture holder or the holder of succession certificate or other legal representative of the demised Debenture holder as the Registered Debentures holder of such Registered Holder’s Debentures if such a person obtains probate or letter of administration or is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter and delivers a copy of the same to the Company. The Company may in its absolute discretion, where it thinks fit, dispense with the production of the probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Debentures standing in the name of the demised Debenture holder(s) on production of sufficient documentary proof or indemnity. In case a person other than individual holds the Debentures, the rights in the Debentures shall vest with the successor acquiring interest therein, including liquidator or such any person appointed as per the applicable law. Notices The notices, communications and writings to the Debenture holder(s) required to be given by the Company shall be

xx


deemed to have been given if sent by registered post / courier / email / hand delivered to the Registered Debenture holder(s) at the address of the Debenture holder(s) registered with the Corporate Office. All notices, communications and writings to be given by the Debenture holder(s) shall be sent by registered post or by hand delivery to the Company at its Corporate Office or to such persons at such address as may be notified by the Company from time to time and shall be deemed to have been received on actual receipt of the same. Rights of Debenture holders The Debenture holder(s) shall not be entitled to any right and privileges of shareholders other than those available to them under the Act. The Debenture shall not confer upon the holder the right to receive notice(s) or to attend and to vote at any general meeting(s) of the shareholders of the Company. Modifications of Rights The rights, privileges and conditions attached to the Debentures may be varied, modified or abrogated upon a Special Request or by a Special Resolution duly passed at the meeting of the Debenture holders convened in accordance with the provisions set out in the Debenture Trust Deed. Future Borrowings Subject to the applicable regulations, the Company shall be entitled, from time to time, to make further issue of Debentures, other debt securities (whether pari passu or junior to the Debentures) and other instruments and securities to any person or persons including to the public or a section of the public and/or members of the Company and / or to raise further loans, advances and / or avail further financial and / or guarantee facilities from financial institutions, banks and / or any other person(s) without any further approval from or notice to the Debenture holders / Debenture Trustee. Tax Benefits A debenture holder is advised to consider the tax implications in respect of subscription to the Debentures after consulting his / its tax advisor. Coupon Cheques / Refund Cheques Loss of Coupon cheques / refund cheques should be intimated to the Company immediately. Upon receipt of request for issue of duplicate Coupon cheques / refund cheques, the Company shall consider the same and such issue of duplicate cheques shall be governed by applicable law and any other conditions as may be prescribed by the Company. Debenture Trustee The Issuer has received the consent of SBICAP Trustee Company Limited to act as the Trustees on behalf of the Debenture Holders. All the rights and remedies of the Debenture holders shall vest in and shall be exercised by the Debenture Trustee without referring to the Debenture holders. All investors are deemed to have irrevocably given their authority and consent to SBICAP Trustee Company Limited to act as their debenture trustee and for doing such acts and signing such documents to carry out their duty in such capacity. Any payment by the Company to the Debenture Trustee on behalf of the Debenture holders shall discharge the Company pro tanto to the Debenture holders. Resignation / retirement of the Debenture Trustee shall be as per terms of the trust deed executed between the Company and the Debenture Trustee. A notice in writing to the Debenture holders shall be provided for the same. Valuation Agency The Company has entered into valuation agreement(s) with SEBI registered credit rating agency namely Credit Analysis & Research Limited (“CARE”). The details of Valuation Agent and the website link of the Valuation Agent where the Valuations shall be available will be communicated by the Issuer to the Debenture holder. Such communication shall form part of this Disclosure Document. The Valuation Agent will publish the valuation on its website at least once every calendar week. The valuation of the Debentures shall be available at http://www.edelweissarc.in and on the website of

xx


the Valuation Agency within 7 Working Days from Deemed Date of Allotment. Upon request by any Debenture Holder for the value of the Debentures, the Issuer shall arrange to provide the same. The Company reserves the right to change the Valuation Agent at its sole and absolute discretion, during the tenure of the Debentures without giving any reasons or prior notice to the Debenture holders. The Issuer shall inform about such change as and when it occurs to the Debenture holders. Anti Money Laundering Since these debentures are issued only in “demat mode” and the Company uses depository system for allotment of the debentures, KYC checks conducted by depository participants at the time of accepting the customer or transaction under the prevention of money laundering policy adopted by depositories or depository participant shall be considered adequate irrespective of risk level of the customer or transaction. However, as a matter of a good practice, Company may examine transactions / clients that may fall under “suspicious transactions” category as defined under Prevention of Money Laundering Act, 2002 and seek further information from the clients.

XIX. SPECIFIC DISCLOSURES AS PER THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014:

(a) MANAGEMENT’S PERCEPTION OF RISK FACTORS:

The Issuer believes that the following risk factors may affect its ability to fulfill its obligations in respect of the Debentures. All of these factors are contingent which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. Potential investors should perform their own independent investigation of the financial condition and affairs of the Issuer, and their own appraisal of the creditworthiness of the Issuer. Potential investors should consult their own financial, legal, tax and other professional advisors as to the risks and investment considerations with respect to the Debentures. Potential investors should thereafter form their own views prior to making any investment decision. POTENTIAL INVESTORS ARE ADVISED TO CAREFULLY READ THESE PRINCIPAL RISKS ASSOCIATED WITH THE DEBENTURES. THE ORDER OF THE RISK FACTORS APPEARING HEREUNDER IS INTENDED TO FACILITATE EASE OF READING AND REFERENCE AND DOES NOT IN ANY MANNER INDICATE THE IMPORTANCE OF ONE RISK FACTOR OVER ANOTHER. THESE RISKS ARE NOT, AND ARE NOT INTENDED TO BE, A COMPLETE LIST OF ALL RISKS AND CONSIDERATIONS RELEVANT TO THE DEBENTURES OR THE POTENTIAL INVESTOR’S DECISION TO PURCHASE THE DEBENTURES.

Please note that unless specified or quantified in the relevant risk factors, the Issuer is not in a position to quantify the financial or other implications of any risk mentioned herein below:

INTERNAL RISK FACTORS

i. Credit Risk

Any lending and investment activity by the Company is exposed to credit risk arising from interest / repayment default by borrowers and other counterparties. Being an SC / RC, the Company has invested in Security Receipts having underlying assets being Non-performing assets (NPAs) and has also lent money to borrowers having high credit risks. The Company is also exposed to the risk of borrowers who owe money, securities or other dues and does not meet their obligations due to various reasons. The value of the security / collateral granted in favour of the Company, as the case may be, maydecline due to adverse market and economic conditions (both global and domestic), delays in insolvency, winding up and foreclosure proceedings, defects in title, difficulty in locating moveable assets, inadequate documentation in respect of assets secured and the necessity of obtaining regulatory approvals for the enforcement of the security over the assets and the Company may not be able to recover the estimated value of the assets, thus exposing it to potential losses.

xx


Any delay in enforcing the collateral due to delays in enforcement proceedings before Indian courts or otherwise could also expose the Company to potential losses. Although the Company regularly reviews its credit exposures, defaults may arise from events or circumstances that are difficult to detect or foresee. The principal amount is subject to the credit risk of the issuer whereby the investor may or may not recover all or part of the funds in case of default by the issuer.

ii. Repayment of principal and interest is subject to the credit risk of the Issuer Potential investors should be aware that repayment of the principal amount, (i.e. the redemption amount) and payment of interest and any other amounts that may be due in respect of the Debentures is subject to the credit risk of the Issuer. Potential investors assume the risk that the Issuer will not be able to satisfy its obligations under the Debentures. In the event that bankruptcy proceedings or composition, scheme of arrangement or similar proceedings to avert bankruptcy are instituted by or against the Issuer, the payment of sums due on the Debentures may not be made or may be substantially reduced or delayed.

iii. Interest Rate Risk on Bonds / Government securities: Bonds/ Government securities which are fixed return securities, run price-risk like any other fixed income security. Generally, when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The level of interest rates is determined by the rates at which government raises new money through RBI, the price levels at which the market is already dealing in existing securities, rate of inflation etc. The extent of fall or rise in the prices is a function of the prevailing coupon rate, number of days to maturity of a security and the increase or decrease in the level of interest rates. The prices of Bonds/ Government securities are also influenced by the liquidity in the financial system and/or the open market operations (OMO) by RBI. Pressure on exchange rate of the rupee may also affect security prices. Such rise and fall in price of bonds/ government securities may influence valuations as and when such changes occur.

iv. Changes or discontinuance of the Underlying: Changes in the Underlying and factors which either affect or may affect the value of the Underlying, may affect the return on an investment in the Debentures. In case of the regulators or the authorized bodies discontinuing or restricting the use of the benchmark/underlying, the Issuer will be bound to take necessary action as may be prescribed by the regulators or the authorized body or as may be required by the law or as may be required to accommodate the situation.

v. Access to Capital Markets and Commercial Borrowings With the growth of its business, the Company will increasingly rely on funding from the debt capital markets and commercial borrowings. The Company’s growth will depend on its continued ability to access funds at competitive rates which in turn will depend on various factors including its ability to maintain its credit ratings. If the Company is unable to access funds at an effective cost that is comparable to or lower than its competitors, the Company may not be able to have adequate funds to meet the requirements of the business. This may adversely impact its business results and its future financial performance.

vi. Commercial Papers and Short term borrowings The Company, being SC / RC, does not have access to public deposits. A major portion of the Company’s funding requirements is currently met through short term funding sources such as short term loans from banks and other bodies corporate. The Company has raised/may raise money by issue of Commercial Papers to meet its short term borrowings. Potential funding mismatches can be created if short term funding sources are not available to the Company. This could have a negative impact on the business and future financial performance of the Company.

vii. Downgrading in credit rating

xx


CARE Limited has assigned CARE PP-MLD AA (SO)* {(pronounced “CARE PP-MLD Double A(Structured Obligation)} for long term borrowings through NCDs. The Company cannot guarantee that this rating will not be downgraded. In the event of deterioration in the financial health of the Company, there is a possibility that the Rating Agency may downgrade the rating of the Debentures. In such cases, investors may have to take losses on re-valuation of their investment or make provisions towards sub-standard / non-performing investment as per their usual norms. Such a downgrade in the credit rating may lower the value of the Debentures and / or the Company’s ability to meet its obligations in respect of the Debentures could be affected.

viii. Any change in the laws regulating our business may have an adverse impact our business and impacting our profitability

The Issuer is subject generally to changes in Indian law, as well as to changes in government regulations and policies and accounting principles. Any change in the regulatory framework could adversely affect the profitability of the Issuer or its future financial performance, by requiring a restructuring of its activities, increasing costs or otherwise.

ix. The Company is exposed to various operational risks, including the risk of fraud and other misconduct by

employees or outsiders

The Company is exposed to various operational risks and system risk as a result of range of factors, viz., improper authorizations, inappropriate documentations, failure in maintenance of proper policies, frauds, inadequate training and employee errors. Further, the security risk in terms of handling information technology related products involves certain risks like data loss, confidentiality, and business continuity and network security.

The Company is also exposed to various risks such as fraud or misconduct by our employees or by outsiders, un-authorised transactions by employees or third parties, misreporting of and non-compliance with the statutory and legal requirements and operational errors. Any instance of employee misconduct, fraud or improper use or disclosure of confidential information could result in regulatory and legal proceedings against the Company which if unsuccessfully defended, could materially and adversely affect our business, future financial performance and results of operations.

x. Security may be insufficient to redeem the Debentures

In the event that the Company is unable to meet its payment and other obligations towards Investors under the terms of the Debentures, the Debenture Trustee may enforce the Security as per the terms of the Debenture Trust Deed and other transaction documents.

xi. Returns on Debentures are subject to Model Risk Returns on the Debentures are based on complex mathematical models involving multiple derivative exposures and the actual behavior of the Underlying Reference Index may significantly differ from returns predicted by the mathematical models.

EXTERNAL RISK FACTORS

i. The Debentures may be illiquid The Company intends to list the Debentures on the WDM segment of the BSE. The Company cannot provide any guarantee that the Debentures will be frequently traded on the Stock Exchange and that there would be any market for the Debentures. It is not possible to predict if and to what extent a secondary market may develop for the Debentures or at what price the Debentures will trade in the secondary market or whether such market will be liquid or illiquid. The fact that the Debentures may be so listed or quoted or admitted to trading does not necessarily lead to greater liquidity than if they were not so listed or quoted or admitted to trading. The Company may, but is not obliged to, at any time purchase the Debentures at any price in the

xx


market or by tender or private agreement. Any Debentures so purchased may be resold or surrendered for cancellation. The more limited the secondary market is, the more difficult it may be for holders of the Debentures to realise value for the Debentures prior to settlement of the Debentures. Further, the Company may not be able to issue any further Debentures, in case of any disruptions in the securities market.

ii. A slowdown in economic growth in India could cause the Company's business to suffer The Company's performance, quality and growth of the business are necessarily dependent on the health of the overall Indian economy. Any slowdown in the Indian economy could adversely affect the business of the Company including but not limited to its ability to acquire the loan portfolio, non performing assets, the quality of the assets to be acquired, ability to implement its strategy etc.

iii. Political instability or changes in the Government could delay further liberalization of the Indian economy and

adversely affect economic conditions in India generally, which could impact the Company's financial results and prospects

Political instability could arise due to several reasons. Any political instability in the country could impact our business.

iv. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely

affect the financial markets and the Company's business

Terrorist attacks and other acts of violence or war may negatively affect the Indian markets and may also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence. In addition, adverse social, economic and political events in India could have a negative impact on the Company. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on the Company's business.

v. Change in Policies / Regulations

We are subject to changes in Indian laws, regulations and accounting principles. There can be no assurance that the laws governing the securitization companies will not change in the future or that such changes or the interpretation or enforcement of existing and future laws and rules by governmental and regulatory authorities will not affect our business and future financial performance.

(b) DETAILS OF DEFAULT, IF ANY, INCLUDING THEREIN THE AMOUNT INVOLVED, DURATION OF DEFAULT AND PRESENT

STATUS, IN REPAYMENT OF –

(i) Statutory Dues: Nil (ii) Debentures and interest thereon: The Company has not defaulted in redemption of Debentures or in payment

of interest to the Debenture holders. (iii) Deposits and interest thereon: The Company has not accepted any deposits. (iv) Loan from any bank or financial institution and interest thereon: The Company has not defaulted in repayment

of loan and payment of interest taken from Banks. (c) NAMES, DESIGNATION, ADDRESS AND PHONE NUMBER, EMAIL ID OF THE NODAL / COMPLIANCE OFFICER OF THE

COMPANY, IF ANY, FOR THE PRIVATE PLACEMENT OFFER PROCESS: Mr. Deepak Nautiyal Company Secretary Edelweiss House, Off C.S.T. Road, Kalina, Mumbai – 400 098, Maharashtra.

xx


Tel: +91 22 4088 5780 Email id: [email protected]

(d) PARTICULARS OF THE OFFER a. Date of passing of the Board Resolution: July 30, 2014.

b. Date of passing of resolution in the General Meeting, authorizing the offer of the Debentures: August 10, 2015.

c. Kinds of securities offered and class of security: Principal Protected - GSEC Linked Redeemable Non-convertible

Debentures of the face value of Rs. 100,000/- each.

d. Price at which the security is being offered including the premium, if any, along with justification of price:

Rs. 100,000/- per Debenture.

e. Name and address of the valuer who performed valuation of the security offered:

Immovable Property Security Receipts

Jatin Bhuta & Associates A/3, Pranav C.H.S., 2nd Floor, Bldg. No. 44, Gandhi Nagar, Above Hotel Highway Gomantak, Opp. M.I.G. Club, Behind Mhada, Bandra (E) Mumbai 400 051.

NGS & Co. LLP B – 46, 3

rd Floor, Pravasi Estate,

V N Road, Goregaon (E), Mumbai – 400 063.

f. Amount which the Company intends to raise by way of securities: Rs 500,000,000/-.

g. Terms of raising of securities: As per the summary term sheet attached.

h. Proposed time schedule for which the offer letter is valid: Till redemption.

i. Purposes and objects of the offer: General corporate purposes and business operations.

j. Contribution being made by the promoters or directors either as part of the offer or separately in furtherance of

such objects: Not Applicable

k. Principal terms of assets charged as security, if applicable: As per the Summary Term Sheet attached.

(e) DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION ETC.

(i) Any financial or other material interest of the Directors, Promoters or Key Managerial Personnel in the Offer and the effect of such interest in so far as it is different from the interests of other persons.

NONE

(ii) Details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a

statutory authority against any promoter of the Offeree Company during the last three years immediately preceding the year of the circulation of the Disclosure Document and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action.

NONE

(iii) Remuneration to the Directors ( During the current year and last three financial years)

xx


Sl. No. Name of the Director Financial Year ended

March 31, 2016 (Rs.)

Financial Year ended March 31, 2015

(Rs.)

Financial Year ended March 31, 2014

(Rs.)

1. Mr. Taruvai Subbayya Krishnamurthy

2,20,000 2,00,000 1,40,000

2. Mr. Venkataraman Janakiraman 1,60,000 1,80,000 1,20,000

3. Mr. Kasaragod Ashok Kini 2,10,000 2,80,000 1,40,000

4. Mr. Sudeshkumar Gulati 2,40,000 1,40,000 1,40,000

5. Mr. Vikas Balia - 20,000 -

6. Mr. Rashesh Shah - - -

7. Ms. Vidya Shah - - -

8. Mr. Siby Antony* 91,94,304 70,04,667 67,22,421

* The remuneration details are excluding Bonus.

(iv) Related party transactions entered during the last three financial years immediately preceding the year of circulation of Disclosure Document including with regard to loans made or, guarantees given or securities provided.

(Amount in Rs.)

Financial Year ended Financial Year ended


Capital account transactions

Allotment of equity shares

Edelweiss Custodial Services Limited - - 24,95,45,740

Loan taken

Edelweiss Financial Services Limited 5,00,000 - -

Loan repaid

Edelweiss Financial Services Limited 5,00,000 - -

Current account transactions

Reimbursement Paid

Amounts taken 7,27,29,813 2,32,205 29,64,155

Amounts repaid

Edelweiss Financial Services Limited 7,27,82,320 2,32,205 29,64,155

Cost reimbursements paid

Edelweiss Financial Services Limited 2,92,147 2,07,344 7,00,326

Remuneration

Mr. Siby Antony 91,94,304 70,04,667 67,22,421

xx


Balance with related parties

Trade receivable

Edelweiss Financial Services Limited 3,101 - -

Trade payable - - -

Edelweiss Financial Services Limited - 3,03,378 7,15,411

(v) Summary of reservations or qualifications or adverse remarks of auditors in the last five financial years

immediately preceding the year of circulation of Disclosure Document and their impact on the financial statements and financial position of the company and the corrective steps taken and proposed to be taken by the company for each of the said reservations or qualifications or adverse remark.

NONE (vi) Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act, 2013 or any

previous Company law in the last three years immediately preceding the year of circulation of DD in the case of Company. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the DD and if so, section-wise details thereof for the Company.

NONE (vii) Details of acts of material frauds committed against the Company in the last three years, if any, and if so, the

action taken by the Company.

NIL

(f) FINANCIAL POSITION OF THE COMPANY

(i) Profits of the Company, before and after making provision for tax, for the three financial years immediately preceding the date of circulation of DD:

Please refer Annexure A.

(ii) Dividends declared by the Company in respect of the last three financial years; interest coverage ratio for last

three years (Cash profit after tax plus interest paid / interest paid):

Particulars Financial Year ended Financial Year ended Financial Year ended


Dividend per equity share Nil Nil Nil

Interest coverage ratio 1.33 1.35 3.21

(iii) A summary of the financial position of the Company as in the three audited balance sheets immediately

preceding the date of circulation of the DD:

Please refer the Section “Key Operational and Financial Parameters for last three financial years” alongwith Annexure A.

(iv) Audited Cash Flow Statement for the last three financial years immediately preceding the date of circulation of

the DD:

xx


Refer Annexure – A

(v) Any change in accounting policies during the last three years and their effect on the profits and the reserves of the Company.

NONE

(g) DECLARATION BY THE BOARD OF DIRECTORS

The Board of Directors declares that:-

(i) the Company has complied with the provisions of the Act and the Rules made thereunder;

(ii) the compliance with the Act and the Rules does not imply that payment of interest or repayment of debentures, is guaranteed by the Central Government; and

(iii) the monies received under the Offer shall be used only for the purposes and objects indicated in this Disclosure Document.

XX. UNDERTAKINGS BY THE INVESTOR

The following risks associated to the Debentures, is subject to and pursuant to the terms of the Debentures as provided in this Disclosure Document, The initial subscriber by subscribing to, and any subsequent purchaser by purchasing the Debentures, shall be deemed to have agreed, and accordingly the Company shall be entitled to presume, that each of the initial subscriber, and any subsequent purchaser (Debenture holder, as also referred to hereinabove and hereinafter):

(A) has

i. sufficient knowledge (including of applicable laws, rules, regulations, circulars), experience and expertise as an investor, to make the investment in such Debentures;

ii. not relied on either of the Company, or any of its affiliates, holding company, or any person acting on its behalf for any information, advice or recommendations of any sort except as regards the accuracy of the specific factual information about the terms of the Debentures as set out in the Disclosure Document;

iii. understood that information contained in the Disclosure Document, or any other document issued by the Company is not being construed as business or investment advice; and

iv. made an independent evaluation and judgment of all risks and merits before investing in the Debentures.

(B) has understood there may be delay in listing of the Debentures and even after being listed, may not be marketable or

may not have a market at all. (C) has understood that without prejudice to (A), and (B) above,

i. the method and manner of computation of, returns and calculations on the Debentures shall be solely determined

by the Company, whose decision shall be final and binding;

ii. in the event of any discretions to be exercised, in relation to method and manner of any of the above computations including due to any disruptions in any of the financial markets or if for any other reason the calculations cannot be made as per the method and manner originally stipulated or referred to or implied, such alternative methods or approach shall be used as deemed fit by the Company and may include the use of estimates and approximations. All such computations shall be valid and binding on the Debenture holder, and no liability therefore will attach to the Company.

(D) has understood that in the event that the Debenture holder suffers adverse consequences or loss, the Debenture holder shall be solely responsible for the same and the Company, or any of its affiliates, holding company, or any

xx


person acting on its behalf shall not be responsible, in any manner whatsoever, for any adverse consequences or loss suffered by the Debenture holder, including but not limited to, on the basis of any claim that no adequate disclosure regarding the risks involved was made or that the full risks involved were not explained or understood.

(E) has reviewed the terms and conditions applicable to the Debentures as contained in the Disclosure Document, and

understood the same, and, on an independent assessment thereof, confirmed the same to be correct and, found the same acceptable for the investment made and has also reviewed the risk disclosure with respect to the Debentures, and understood the risks, and determined that the Debentures are a suitable investment and that the Debenture holder can bear the economic risk of that investment, including the possibility of receiving lower than expected returns.

(F) has received all the information believed to be necessary and appropriate or material in connection with, and for, the

investment in the Debentures. (G) holds the Debentures as an investment and has not purchased the Debentures on a speculative basis; (H) as an investor, is knowledgeable about applicable laws, rules, regulations with respect to the Debentures and is

experienced in making investments, including in debt instruments having variable or unpredictable returns or no returns and also investments similar to the Debentures.

(I) in investing in the Debentures:

i. has obtained such independent and appropriate financial, tax, accounting and legal advice as required and/or

deemed necessary, to enable the Debenture holder to independently evaluate, assess and understand the appropriateness, merits and risks associated with investing in the Debentures, and also as to the Debenture holders’ legal competency and ability (including under applicable laws and regulations), to invest in the Debentures;

ii. has assumed, on the Debenture holders’ own account, all risk of loss that may occur or be suffered including as to the returns on and/or the sale value of the Debentures and shall not look directly or indirectly to the Company (or to any person acting on its behalf) to indemnify or otherwise hold the Debenture holder harmless in respect of any such loss and/or damage.

(J) has understood that, at any time during the term of the Debentures, the value of the Debentures may be substantially

less than its redemption amount. (K) undertakes that, if the Debenture holder sells the Debentures to subsequent investors, the Debenture holder shall

ensure, and it is the Debenture holder’s obligation in that regard, that:

i. the subsequent investors receive the terms and conditions, risks and representations contained in the Disclosure Document and any other related document and fully understand the Debentures;

ii. sale to subsequent investors will be subject to such investors having confirmed the receipt of all of (1) above;

iii. the sale and transfer of the Debentures shall be effected only in the manner stipulated: by the Stock Exchange in accordance with the rules, regulations and bye-laws of the Stock Exchange.

(L) has the legal ability to invest in the Debentures, and the investment does not contravene any provision of any law,

regulation or contractual restriction or obligation or undertaking binding on or affecting the Debenture holder, or its assets.

(M) where the Debenture holder is a partnership firm:

i. its investing in the Debentures on its terms is within the scope of its investment policy and is not in conflict with the provisions of the partnership deed currently in force;

xx


ii. the investment in Debentures is being made by and on behalf of the partners (and binds all the partners jointly and severally), and that the partnership is in force and existing, and the investment has been ratified by all of the partners, jointly and severally;

iii. the investment in Debentures has been duly authorised by all the partners, and does not contravene any provisions of the partnership deed, or any law, regulation or contractual restriction or obligation or undertaking binding on or affecting the partnership or its assets or any of the partners or their respective assets;

iv. for any minor as may have been admitted to the benefits of the partnership, the legal guardian of the minor has confirmed that the above applies equally to the minor as if the minor were a partner; and

v. for any Hindu Undivided Family (“HUF”) that may be partner, the Karta declares that the above equally binds each of the co-parcenors and beneficiaries of the HUF.

(N) where the Debenture holder is a company, also confirms that:

i. notwithstanding the variable nature of the return on the Debentures, the Debenture holder is not precluded under

any law, rules, regulations and/ or circular/s issued by any statutory authority/ies including under the Companies Act, 2013 and its Rules, from investing in the Debentures;

ii. all necessary corporate or other necessary action has been taken to authorize, and that the Debenture holder has corporate ability and authority, to invest in the Debentures; and

iii. investment in the Debentures does not contravene any provisions of the memorandum and the articles of association, or any law, regulation or contractual restriction or obligation or undertaking binding on or affecting the Debenture holder or the Debenture holder’s assets.

(O) where there is an intermediary who sells the Debentures and/or invests in the Debentures on behalf of its

Clients/investor(s) (“Intermediary”), it also confirms that:

i. it is registered with SEBI;

ii. it is fully in compliance with the laws and regulations applicable to it including the Prevention of Money Laundering Act, 2002 (“PML Act”), the Prevention of Money Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 (“PML Rules”), the requirements of Circular dated 20th March 2006 “Guidelines on Anti-Money Laundering Standards” of the SEBI (“AML Guidelines”) together with the PML Act and the PML Rules, the “AML Laws & Rules”), all applicable know-your-client norms (“KYC Guidelines”) and all applicable rules, regulation and guidelines issued by any relevant regulator and the Intermediary has strictly complied with all applicable AML Laws & Rules and KYC Guidelines in relation to each of the Clients / investor(s);

iii. the Intermediary is selling the Debentures, to appropriate Clients/the investor(s) or is investing on behalf of its Clients /the investor(s) appropriately and such sale / investment in the Debentures is within the scope of its authority and accordingly binds each of the Clients/ investor(s);

iv. the intermediary has satisfied itself as to the capacity and authority of each of the Clients / investor(s) to invest in such Debentures;

v. the Intermediary has conducted a risk profiling of each Client / Investor (s) pursuant to the Structured Products Guidelines and has satisfied itself that the Debentures are suitable to the risk profile of the Client / investor.

vi. the Intermediary has fully advised each of its Clients / the investor(s) of the risks relating to investment in the Debentures and ensured that the Client / investor has understood the risks involved in investment in the Debentures and is capable of taking the risks posed by the Debentures;

vii. the Intermediary in case of a Portfolio Manager as required under the SEBI (Portfolio Managers) Regulations, 1993 and in case of any other Intermediary under the regulations applicable to that Intermediary has fully advised each of its Clients / the investor(s) of the rights of such Clients / investor(s) against the Intermediary as its principal and accepts responsibility for such advice;

xx


viii. Should there be any dispute by the Clients / investor(s) as regards the investment in the Debentures including but not limited to the scope of its authority with regard to such investment the same shall be dealt with entirely by the Intermediary with each of the Clients / investor(s), with no reference to the Issuer;

ix. the Intermediary hereby consents (including on the basis of any request made by the Issuer in this regard) to provide and/or to the disclose to the Issuer any information regarding any or all of the Client / investor and the investment in the Debenture, as required under applicable regulations and/or as requested by any governmental or regulatory authority or under a provision of law and agrees that such information shall be disclosed by the Issuer to any governmental and/or regulatory authorities;

x. The Intermediary shall provide its Clients / the investor(s) with a copy of the Offer Document;

xi. The Intermediary shall guide the Clients / investor(s) as to where the valuations (of the Debentures) will be available;

xii. The Intermediary shall guide the Clients / investor(s) as to the applicable exit loads/exit options/liquidity support, (if any) etc. being provided by the Issuer or through the secondary market;

xiii. The Intermediary confirms and undertakes that it has not and will not use the name of the Issuer or any of its group entities in any of its advertisement or any marketing material other than for the selling the Debentures; and

xiv. The Intermediary confirms that the marketing material shall only contain information that is provided in this Disclosure Document and should not contain any information that is extraneous to this Disclosure Document.

XXI. DISCLAIMERS:

This Disclosure Document in relation to the Debentures is made available by the Company to the applicant on the further strict understanding that

i. the applicant is a “Person Resident in India” as defined under the Foreign Exchange Management Act, 1999,

ii. in providing this Disclosure Document to the applicant, the applicant confirms that there will be no violation of rules, regulations and byelaws issued by any applicable authority including those issued by the Securities and Exchange Board of India;

iii. the applicant has sufficient knowledge, experience, and professional advice to make his own evaluation of the merits and risks of a transaction of the type under this Disclosure Document; and

iv. the applicant is not relying on the Issuer nor on any of the affiliates or the Holding Company for information, advice or recommendations of any sort except for the accuracy of specific factual information about the possible terms of the transaction.

The Company is not acting as the advisor or agent of the applicant. This Disclosure Document does not purport to identify for the applicant, the risks (direct or indirect) or other material considerations, which may be associated with the applicant entering into the proposed transaction. Prior to entering into any proposed transaction, the applicant should independently determine, without reliance upon the Company or the affiliates of the Company or the Holding Company, the economic risks and merits, as well as the legal, tax, and accounting characterizations and consequences of the transaction and including that the applicant is able to assume these risks. The Company, and/or the affiliates of the Company or the Holding Company, may act as principal or agent in similar transactions and/or in transactions with respect to instruments underlying a proposed transaction. The Company, and/or the affiliates of the Company and / or the Holding Company may, from time to time, have a long or short proprietary position/s and/or actively trade, by making markets for its clients, in financial products identical to or economically related to those financial products described in this Disclosure Document. The Company may have a commercial relationship with and access to information of reference securities, financial products, or other interests underlying a transaction. This Disclosure Document and its contents are the Company’s property, and are to be considered proprietary information and may not be reproduced or otherwise disseminated in whole or in part without the Issuer’s written consent unless required to by judicial or administrative proceeding, and then with prior notice to the Company.

xx


Applicants must understand that while the Debentures would be listed, in view of the nature and complexity of the Debentures, marketability may be impacted in a manner that cannot be determined. Past performance is not indicative of future performance. Investment in the Debentures may be subject to the risk of loss, meaning the Debenture holder may lose some or all of its investment especially where changes in the value of the transaction may be accentuated by leverage. Even where the Debentures are principal protected, there is a risk that any failure by a person including a counterparty to perform obligations when due may result in the loss of all or part of the investment. No liability whatsoever is accepted for any loss arising (whether direct or consequential) from any use of the information contained in this Disclosure Document. The Company undertakes no obligation to effect any updates on information. Any opinions attributed to the Company, and/or the affiliates of the Company and / or the Holding Company constitute the Company’s judgment as of the date of the material and are subject to change without notice. Provision of information may cease at any time without reason or notice being given. The past performance of the Company in any product/scheme/instrument etc. is not indicative of the future performance in the same product/scheme/instrument etc or in any other product / scheme / instrument etc. either existing or that may be offered. There is no assurance that past performances indicated in earlier product/scheme/instrument etc will be repeated. Applicants are not being offered any guaranteed or indicative returns through these Debentures. Applicants must understand that while the issue and other dates are specified, with the change in any regulations by the SEBI or any other regulatory body or for any other reason, the issue itself / these dates can be cancelled / reformed at the discretion of the Issuer and shall be final and binding on the prospective holders / holders of those debentures. NOTE: This Disclosure Document is not intended for distribution and it is meant solely for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The Debentures mentioned herein are being issued on a private placement basis and this offer does not constitute nor should it be considered a public offer/invitation. Nothing in this Disclosure Document shall constitute and/or deem to constitute an offer or an invitation to an offer to the Indian public or any section thereof to subscribe for or otherwise acquire the Debentures. This Disclosure Document and the contents hereof are restricted for only the intended recipient(s) who have been addressed directly through a communication by the Company and have been marked against the serial number provided herein and only such recipients are eligible to apply for the Debentures. Furthermore, NRIs, OCBs, FIIs and other persons resident outside India are not eligible to apply for or hold the Debentures. All investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The Company or any other parties, whose names appear herein, shall not be liable for any statements made herein or any event or circumstance arising there from. Potential investors are required to make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in such instruments.

For Nifty 10 yr Benchmark G-Sec (Clean Price) Index:

Disclaimer by IISL

The Product(s) are not sponsored, endorsed, sold or promoted by India Index Services & Products Limited ("IISL"). IISL does not make any representation or warranty, express or implied, to the owners of the Product(s) or any member of the public regarding the advisability of investing in securities generally or in the Product(s) particularly or the ability of the Nifty 10 yr Benchmark G-Sec Clean Price Index to track general Government Securities market performance in India. The relationship of IISL to the Licensee is only in respect of the licensing of certain trademarks and trade names of its Index which is determined, composed and calculated by IISL without regard to the Licensee or the Product(s). IISL does not have any obligation to take the needs of the Licensee or the owners of the Product(s) into consideration in determining, composing or calculating the Nifty 10 yr Benchmark G-Sec Clean Price Index. IISL is not responsible for or has participated in the determination of the timing of, prices at, or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) is to be converted into cash. IISL has no obligation or liability in connection with the administration, marketing or trading of the Product(s).

IISL does not guarantee the accuracy and/or the completeness of the Nifty 10 yr Benchmark G-Sec Clean Price Index or any data included therein and they shall have no liability for any errors, omissions, or interruptions therein. IISL does not make

xx


any warranty, express or implied, as to results to be obtained by the Licensee, owners of the product(s), or any other person or entity from the use of the Nifty 10 yr Benchmark G-Sec Clean Price Index or any data included therein. IISL makes no express or implied warranties, and expressly disclaim all warranties of merchantability or fitness for a particular purpose or use with respect to the Index or any data included therein. Without limiting any of the foregoing, IISL expressly disclaim any and all liability for any damages or losses arising out of or related to the Products, including any and all direct, special, punitive, indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages.

Disclaimer on Valuation

(i) Disclaimer by the Issuer

The Valuation reflects the independent views of the Valuation Agent. It is expressly stated that the valuation is not the view of the Issuer or its affiliates. The Issuer has not reviewed the Valuation and is not responsible for the accuracy of the Valuations. The Valuations provided by the Valuation Agent, and made available on the website of the Issuer and the Valuation Agent do not represent the actual price that may be received upon sale or redemption of the Debentures. They merely represent the Valuation Agent's computation of the valuation which may in turn be based on several assumptions. The Valuations provided by the Valuation Agent may include the use of models by the Valuation Agent (that may be different from the proprietary models used by the Issuer and / or the calculation agent) and consequently, valuations provided by other parties (including the Issuer and / or the calculation agent) may be significantly different.

(ii) Disclaimer by the Valuation Agent

Post appointment of the Valuation Agent by the Issuer, the disclaimer clause of Valuation Agent shall be communicated to the Debenture holder and the said disclaimer clause shall form part of this Disclosure Document.

xx

Product Code: E8E602 Page A1

22. A ) SUMMARY TERM SHEET FOR E8E602A

Security Name EARC – GSEC Linked Non Convertible Debentures

Product Code E8E602

Option Type Option A

Issuer EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED

Type of Instrument Principal Protected - GSEC Linked Redeemable Non-convertible Debenture

Nature of Instrument Secured

Seniority Senior

Principal Protection Principal is protected at maturity

Underlying / Reference Index Nifty 10 yr Benchmark G-Sec (Clean Price) index

Mode of Issue Private Placement

Option to retain oversubscription (Amount)

Not Applicable

Eligible Investors The following categories of investors, when specifically approached, are eligible to apply for this private placement of Debentures

Individuals

Hindu Undivided Family

Trust

Limited Liability Partnerships

Partnership Firm(s)

Portfolio Managers registered with SEBI

Association of Persons

Companies and Bodies Corporate including Public Sector Undertakings.

Commercial Banks

Regional Rural Banks

Financial Institutions

Insurance Companies

Mutual Funds

Any other investor eligible to invest in these Debentures

Listing The Company proposes to list these Debentures on the BSE WDM segment. The Issuer confirms that the Debentures would be listed within 20 days from the Deemed Date of Allotment.

Rating of the Instrument CARE PP-MLD AA (SO)* {(pronounced “CARE PP-MLD Double A(Structured Obligation)} by CARE Limited for Rs. 100 Crores Principal Protected Market Linked Debenture issue. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. CARE’s rating of Market Linked Debentures is an assessment of the underlying credit risk of the instrument. The rating addresses only the credit risk associated with timely payment of obligations as per terms of the issuance. The rating does not address the market risks associated with the instrument on account of linking of coupon payment to external variables such as reference equity index, equity shares, commodity process/index. This could result in variability or absence of coupon payments because of adverse movement in value of the external variables.

Minimum Application Size 100 debenture(s) and in multiples of 1 debentures thereafter.

Maximum Application Size 5000 debentures

Initial Fixing Date 20-May-16

Initial Fixing Level Official Closing Level of Nifty 10 yr Benchmark G-Sec (Clean Price) index as on Initial Fixing

xx


Date

Final Fixing Date 31-May-18

Final Fixing Level Official Closing Level of Nifty 10 yr Benchmark G-Sec (Clean Price) index as on Final Fixing Date

Underlying Performance (Final Fixing Level / Initial Fixing Level) – 1

Coupon Scenario Coupon

If Final Fixing Level > 25% of Initial Fixing Level

25.53%

If Final Fixing Level <= 25% of Initial Fixing Level

0.00%

Issue Size 5000 Debentures aggregating upto Rs 500,000,000/-

Objects of the Issue General Corporate purposes and business operations

Details of the Utilisation of the proceeds

The Issuer proposes to augment its resources to meet its requirements of funds to carry on its business operations. The proceeds of the issue of Debentures would be utilized for general corporate purposes.

Step Up / Step Down Coupon Rate

N.A.

Coupon payment frequency Coupon, if any will be paid on Redemption Date

Coupon Payment Dates Coupon, if any will be paid on Redemption Date

Coupon type Coupon linked to Underlying / Reference Index

Coupon reset process (including rates, spread, effective date, interest rate cap and floor etc).

N.A.

Day Count Basis N.A.

Interest on Application Money This issue does not contemplate any interest on application money till allotment of Debentures.

Default Interest Rate In case of default in payment of Coupon and/or principal redemption on the Redemption date, additional interest @ 2% p.a. over the Coupon will be payable by the Company for the defaulting period.

Tenor 824 Days from the Deemed Date of Allotment

Redemption Date 22-Aug-18

Redemption Value Face Value*(1+Coupon)

Discount / Premium at which Debenture is issued

Nil

Issue Price Rs. 100,000/- Per Debenture

Call / Put Option N.A.

Face Value Rs. 100,000/- Per Debenture

Issue Opening Date 20-May-16

Issue Closing Date 20-May-16

Proposed time schedule for which the Disclosure Document is valid

Till redemption

Pay-in-Date 20-May-16

xx


Deemed Date of Allotment 20-May-16

Redemption Premium / Discount

Not Applicable

Put Option None

Put Option Date Not Applicable

Put Option Price Not Applicable

Put Notification Time Not Applicable

Call Option None, except in the case of Early Redemption Option

Call Option Date Not Applicable

Call Option Price Not Applicable

Call Notification Time Not applicable

Issuance mode of Debentures Demat

Trading mode of the Debentures

Demat

Settlement Cheque / pay order will be dispatched by courier or registered post at the address provided in the Application Form / at the address as subsequently notified to the Issuer in writing by Debenture-holder(s) or at the address on the Depository’s record. Where applicable, settlement will be effected by account to account transfer vide Reserve Bank of India’s Real Time Gross Settlement System.

Depository NSDL / CDSL

Business Day Convention All days (except Sunday, any public holiday and any other day on which banks are closed for business in Mumbai).

Holiday Convention If any of the date(s), including the Record Date, as defined in the Disclosure Document fall on a Sunday or a public holiday, the next working day shall be considered as the effective date. However, if any Initial Fixing Date, Final Fixing Date or Observation Date as defined in the Disclosure Document falls on an expiry day, which is thereafter declared as a public holiday/trading holiday, then the day notified by the Exchanges/Regulators as the new expiry day shall be considered as the effective date for the above mentioned dates. In case Redemption Date (for payment of Principal and Coupon, if any) falls on Sunday or a public holiday, the previous working day shall be considered as the effective date.

Security (a) a pari-passu charge on immovable property; (b) hypothecation of the Security Receipts; and (c) unconditional and irrevocable guarantee issued by Edelweiss Financial Services

Limited in favour of the Debenture Trustee for the benefit of the Debenture holders

Security cover under this issue shall be 1x time.

The said security shall be created within such time as permitted under the Companies Act, 2013 or any other applicable law for the time being in force.

Transaction Documents Letter appointing Link Intime India Private Limited as Registrar and Transfer Agents.

Memorandum and Articles of Association of the Company.

Date of passing of Board Resolution: July 30, 2014

Date of passing of resolution in general meeting: August 10, 2015

Consent Letter from SBICAP Trustee Company Limited for acting as Debenture Trustee for and on behalf of the holder(s) of the Debentures.

Consent Letter from Link Intime India Private Limited for acting as Registrars to the Issue

Debenture Trust deed between Company and SBICAP Trustee Company Limited.

Tripartite Agreement between the Company, National Securities Depository Limited (“NSDL”) and the Registrar for the Issue of Debentures in dematerialised form.

Tripartite Agreement between the Company, Central Depository Services (India)

xx


Limited (“CDSL”) and the Registrar for the Issue of Debentures in dematerialised form.

Letter from CARE Limited conveying the credit rating for the Debentures of the Company and the rating rationale pertaining thereto.

License Agreement with IISL and amendments thereafter.

Valuation Agreement between Company and Credit Analysis and Research Limited and amendments thereafter to the respective agreements, as may be applicable.

Any other Document as per the applicable Laws.

Condition precedent to disbursement

None

Condition subsequent to disbursement

None

Events of Default The occurrence of any of the events as mentioned in the Debenture Trust Deed shall constitute an event of default.

Provisions related to Cross Default Clause

N.A.

Early Redemption Option The Company has an option to redeem the Debentures (“Early Redemption Option”), to be exercised by the Company any time after the Deemed Date of Allotment on occurrence of any one or more than one of the following events- “Issuer Tax Change Event” and/or “Change in Law” and/or “Force Majeure Event” and/or “Market Suspension Event” and/or “Reference Index Modification Event“. Further, notwithstanding anything contained in this Disclosure Document, the Company shall not be liable for any failure to perform any of its obligations under this Disclosure Document, if the performance is prevented, hindered or delayed by any one or more of the events mentioned above, its obligations shall be terminated with immediate effect. The decision of the Company about the occurrence of the events mentioned above shall be final and binding in respect of all Debenture holders. Intimation to Investor: If the Company opts to redeem the debentures on occurrence of the events mentioned above, it shall intimate the investor within reasonable time period from the occurrence of any of the events mentioned above that it has exercised the Early Redemption Option. Early Redemption Option Exercise Date: The third Business Day from the date of Early Redemption Option intimation to the debenture holder Redemption Proceeds: In case the Early Redemption Option is exercised by the Company, the Debenture holder shall be paid the fair value of the Debenture calculated as on such Early Redemption Option Exercise Date. The fair value will be calculated by the [Calculation Agent] based on

a. For the Principal Repayment: The present value of the Debenture will be calculated by the calculation agent based on the G-Sec yield one day prior to Early Redemption Option Exercise Date plus AA- spread over G-Sec yield, on the basis of a poll undertaken from three reference market-makers selected by the calculation agent at its sole discretion in good faith.

b. For Coupon Payment: The value of the pay-out will be calculated using the standard ‘Black’ option valuation model with input parameters as determined by the Calculation Agent.

xx


The decision of the Calculation Agent in deciding the Coupon payment based on the ‘Black’ option valuation model, shall be final and binding in respect of all the Debenture holders.

Roles and Responsibilities of Debenture Trustee

As per SEBI (Debenture Trustee) Regulation, 1993, SEBI (Issue and Listing of Debt Securities) Regulations, 2008, the Companies Act, 2013,Listing Agreement, and any other applicable laws, as amended from time to time.

Valuation Agency Fees Fees paid to Valuation Agent by the Issuer shall be in the range of 4 bps p.a. to 15 bps p.a on the face value of the outstanding Debentures

Market Lot The minimum lot size for trading shall be 1 debenture and in multiple of 1 thereafter

Governing Law and Jurisdiction

The Debentures are governed by and will be construed in accordance with the Indian law. The Company, the Debentures and Company’s obligations under the Debentures shall, at all times, be subject to the directions of SEBI. The Debenture holders, by purchasing the Debentures, agree that the Mumbai Courts/Tribunal shall have exclusive jurisdiction with respect to matters relating to the Debentures.

Costs and Expenses All costs and expenses related to the Issue, including but not limited to legal counsel fees, rating fees, stamp duty, debenture trustees fees, listing charges, R&T agent charges etc. will be borne by the Issuer

B. Cash Flows relating to NCDs:

Company EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED

Face Value Rs. 100,000/- Per Debenture

Deemed Date of Allotment 20-May-16

Redemption Date 22-Aug-18

Coupon

Scenario Coupon

If Final Fixing Level > 25% of Initial Fixing Level

25.53%

If Final Fixing Level <= 25% of Initial Fixing Level

0.00%

Frequency of Interest Payment with specified date Coupon if any, will be paid on Redemption Date

Day Count Convention Not Applicable

Cash Flows Date No. of days in

Coupon Period

Amount (in Rupees)

Coupon on Redemption, if any 22-Aug-18 824 * Coupon linked to Underlying /

Reference Index.

Face Value 22-Aug-18 824 Rs. 100,000/- Per Debenture

Total 22-Aug-18 824 Rs. 100,000 *(1+Coupon) /- Per Debenture

* Coupon on the Debentures, if any shall be payable on the Redemption Date

Company reserves the right to change the issue closing date and in such an event, the Deemed date of allotment may also be revised by the Company at its sole and absolute discretion. In the event of any change in the above issue dates, the investors shall be intimated of the revised schedule by the Company.

xx


C. The list of documents which has been executed or will be executed in connection with the issue and subscription of debt securities

a. Debenture Trustee Appointment Agreement;

b. Debenture Trust Deed; and

c. Documents as per applicable laws.

D. Additional Covenants:

a. Security Creation: In case of delay in execution of Trust Deed and Charge documentsbeyond Ninety days from the date of Allotment, the Company will refund the subscription with agreed rate of interest or will pay penal interest of atleast 2% p.a. over the interest / coupon rate / implicit yield till these conditions are complied with at the option of the investor.

b. Delay in Listing: In case of delay in listing of the debt securities beyond 20 days from the deemed date of allotment, the Company will pay penal interest, of atleast 1% p.a. over the interest/coupon rate / implicit yield from the expiry of 30 days from the deemed date of allotment till the listing of such debt securities to the investor.

The interest rates mentioned in above cases are independent of each other.


23.A) SCENARIO ANALYSIS FOR E8E602A

The following table shows the value of the Debenture at maturity under different market conditions:

Scenario I

Final Fixing Level is less than Initial Fixing Level

Underlying Performance Coupon Annualized Return

-100% 0.00% 0.00%

-90% 0.00% 0.00%

-80% 0.00% 0.00%

-75.00% 0.00% 0.00%

-74.99% 25.53% 10.60%

-70% 25.53% 10.60%

-60% 25.53% 10.60%

-50% 25.53% 10.60%

-40% 25.53% 10.60%

-30% 25.53% 10.60%

-20% 25.53% 10.60%

-10% 25.53% 10.60%

Scenario II

Final Fixing Level is equal to Initial Fixing Level


0% 25.53% 10.60%

Scenario III

Final Fixing Level is greater than Initial Fixing Level


10% 25.53% 10.60%

20% 25.53% 10.60%

30% 25.53% 10.60%

40% 25.53% 10.60%

50% 25.53% 10.60%

60% 25.53% 10.60%

70% 25.53% 10.60%

80% 25.53% 10.60%

90% 25.53% 10.60%

100% 25.53% 10.60%


This scenario analysis is provided for illustrative purposes only and does not represent actual termination or unwind prices, nor does it present all possible outcomes or describe all factors that may affect the value of your investment.

Annexure A

Edelweiss Asset Reconstruction Company LimitedRegd office- Edelweiss House, Off. C.S.T. Road, Kalina, Mumbai - 400 098, Tel: +91-22-40094400 Fax: +91-22-40194900

website: www.edelweissarc.com e-mail: [email protected]

Abridged Balance Sheet

(Rs. In Crore)


105.26 100.00 100.00 - - -

7.77 0.10 - - - -

92.49 53.15 19.17

- - -

- - - - - -

960.50 941.00 49.00 8.28 - -

- - - 3.12 4.91 2.14

- - - 1,272.10 380.56 364.37

0.88 0.74 0.64 55.70 35.40 38.12

2.98 1.87 0.87

2,509.08 1,517.72 574.31

- - - 0.84 0.74 0.03 0.14 0.07 - 0.00 - -

- - -

2,228.33 1,177.24 502.48 - 2.75 1.00

7.49 5.66 4.95 - - -

- - - 134.54 196.79 30.47

- - - 68.98 105.09 12.20 48.65 13.25 0.67 19.88 16.03 22.29

0.24 0.09 0.24

2,509.08 1,517.72 574.31

(d) Cash & cash equivalent

(f) Other current assets

Total of (5) to (6)

(6) Current Assets (a) Current Investment (b) Inventories (c) Trade receivables

(e) Short term loans and advances

(iii) Intangible assets under development

(b) Non-current Investment (c) Deferred tax assets (net) (d) Long term loans & advances (e) Other non-current assets

II ASSETS (5) Non-current Assets (a) Fixed Assets (i) Tangible Assets (Original cost less depreciation) (ii) Intangible Assets (Original cost less depreciation / amortisation) (iii) Capital work-in-progress

(b) Trade payables (c) Other current liabilities (d) Short Term provisions

Total of (1) to (4)

(b) Deferred tax Liabilities (Net) (c) Other long term liabilities (d) Long term provisions

(4) Current Liabilities (a) Short term borrowings

(2) Share Application Money pending allotment (3) Non-current Liabilities (a) Long-term borrowings

(ii) Preference

(b) Reserve & Surplus (i) Capital reserves (Including Revaluation Reserves, if any) (ii) Revenue Reserves (iii) Surplus

Pursuant to first proviso to sub-section (1) of section 136 of the Act and Rule 10 of Companies (Accounts) Rules, 2014

Year EndedParticulars

I EQUITY & LIABILITIES(1) Shareholder's Fund (a) Paid up share (i) Equity

(c) Money received against Share warrants



Abridged Statement of Profit & LossPursuant to first proviso to sub-section (1) of section 136 of the Act and Rule 10 of Companies (Accounts) Rules, 2014

(Rs. In Crore)


322.46 189.92 18.60 - - -

5.46 2.35 2.80 42.44 12.09 5.04

370.36 204.36 26.45

- - -

370.36 204.36 26.45

14.10 12.55 2.67 207.41 130.49 6.18

0.36 0.18 0.00 79.57 15.33 3.95

301.45 158.55 12.81

68.92 45.81 13.64

VI Tax expenses (a) Current tax 12.91 13.48 4.45 (b) Deferred tax 11.03 -1.76 -0.59

44.98 34.08 9.79

(a) Basic 4.33 3.41 1.24 4.33 3.41 1.24



Abridged Cash Flow statementPursuant to first proviso to sub-section (1) of section 136 of the Act and Rule 10 of Companies (Accounts) Rules, 2014

(Rs. In Crore)


268.90 56.16 16.50

-945.76 -827.96 -425.01

712.26 784.39 408.81

35.40 12.58 0.31

13.25 0.67 0.35

48.64 13.25 0.67

V Profit for the year (V-VI)

Net revenue from operations

6. Cash and cash equivalent at the end of the period

Year Ended

4. Net increase / (decrease) in cash and cash equivalent

5. Cash and cash equivalent at the begning of the period

3. Cash flow from financing activities

V Earning per equity share (Face value Re.1 each) :

Particulars

1. Cash flow from operating activities

2. Cash flow from investing activities

(b) Diluted

ParticularsYear Ended

(a) Employee benefit expenses (b) Finance cost (c) Depreciation and amortisation expenses (d) Other expenses Total Expenditure

V Profit before tax (III-IV)

(d) Other operating revenue

II Other Income

III Total Income (I+II)

IV Expenditure

I Income Revenue from operations (a) Fee and commission income (b) Income / (loss) from treasury (c) Interest Income

Annexure B



Unaudited Financial Result for the half year ended September 2015 and year ended March 31, 2015(pursuant to Clause 29 of the Listing Agreement for debt securities)

(Rs. In Crore)Particulars Year Ended Year Ended

March 31, 2016 March 31, 2015

322.46 189.92 - -

5.46 2.35 42.44 12.09

370.36 204.36

- -

370.36 204.36

207.41 130.49 - -

14.10 12.55 5.22 4.81

226.73 147.85

7. Operating Profit before Provisions and Contingencies (3-6) 143.64 56.52

8. Provisions (other than tax) and Contingencies 74.72 10.71

9. Exceptional Items - -

10. Profit (+)/ Loss (-) from Ordinary Activities before tax (7-8-9) 68.92 45.81

23.94 11.73

12. Net Profit(+)/ Loss(-) from Ordinary Activities after tax (10-11) 44.98 34.08

13. Extraordinary items (net of tax expense) - -

14. Net Profit (+)/Loss(-) for the period/year (12-13) 44.98 34.08

15. Paid-up equity share capital (Face Value of ` 1/-) 105.26 100.00

16. Reserves excluding Revaluation Reserves 100.26 53.25

17. Analytical Ratios14.44% 20%

(ii) Earnings Per Share (Basic and Diluted) (See note 2) 4.33 3.41

18. NPA Ratios a) % of Gross NPA to Total credit exposure 39% 100% b) % of Net NPA to Total credit exposure 19% 54%

19. Return on Assets (See note 3) 0.56% 0.81%

Notes:-

1) The above audited financial results of Edelweiss Asset Reconstruction Company Limited ("EARC" or "the Company") for the year ended March 31, 2016 and March 31, 2015 have been reviewed and recommended by the Audit Committee and approved by the Board of Directors at its meeting held on May 9, 2016. 2) Return on Assets has been computed as a percentage of profit after tax to average total assets.

11. Tax Expenses

Net revenue from operations

6. Total expenditure (4+5) excluding Provisions and Contingencies

(i) Capital Adequacy Ratio

4. Interest Expensed

5. Operating Expenses (i+ii) (i) Employee cost (ii) Other operating expenses

(c) Interest Income (d) Other operating revenue

2. Other Income

3. Total Income (1+2)

Revenue from operations1. Income

(a) Fee and commission income (b) Income / (loss) from treasury

DEBENTURE TRUSTEE - Bombay Stock Exchange · of Companies Act, 2013 and the Rules f ramed there µv...

Documents

Transcript of DEBENTURE TRUSTEE - Bombay Stock Exchange · of Companies Act, 2013 and the Rules f ramed there µv...